Recall the Economics in Practice on page 371: According to a study discussed in the Economics in Practice, when students were moved from a class taught by a below-average teacher to one at the 75th percentile, the move
A. increased the students' future earnings by more than 50% per year.
B. increased the students' future earnings by 3.5% per year.
C. actually decreased the students' future annual earnings.
D. made no difference on the students' future annual earnings.
Answer: B
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The producer surplus from a good is equal to the
A) maximum amount a consumer is willing to pay for the good minus the price that actually must be paid summed over the quantity sold. B) actual price of the good minus the maximum amount a consumer is willing to pay for the good. C) opportunity cost of producing the good minus its price summed over the quantity sold. D) price of the good minus its opportunity cost of production summed over the quantity sold.
Suppose real GDP is $12.6 trillion and potential GDP is $12.4 trillion. To move the economy back to potential GDP, Congress should
A) raise taxes by $200 billion. B) lower government purchases by an amount less than $200 billion. C) lower government purchases by $200 billion. D) raise taxes by an amount more than $200 billion. E) lower taxes by $200 billion.
Which of the following is included in M2 but NOT in M1?
A) NOW accounts B) demand deposits C) currency D) money market mutual fund shares (retail)
One example of Ricardian rent is:
a. rent paid to landlords under price controls. b. the difference between the price of a highly demanded unique piece of artwork and the opportunity cost of maintaining it. c. the amount paid to a seller above the equilibrium price of tourist class tickets in order to receive higher quality seats in first class. d. the price rise of wool from a disease among sheep.