The total surplus in a market is represented by:
A) the area between the demand curve and the market price line.
B) the area between the supply curve and the market price line.
C) the area between the demand and supply curves and the price axis.
D) the area between the demand curve and the horizontal axis.
C
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The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered. If 5 concerts are put on, then the
A) marginal external cost will be greater than the marginal social cost. B) marginal external cost will be greater than the marginal private cost. C) marginal external cost will equal the marginal private cost. D) marginal social cost will equal the marginal external cost. E) marginal external cost will equal zero.
Answer the following question with a starting point of simultaneous long run and short run macroeconomic equilibrium, with the overall production level in the economy at the natural rate level of real GDP (YNR). This equilibrium may be illustrated in a diagram with the average price level (P) measured on the vertical axis, and real GDP (Y) measured on the horizontal axis. The long run equilibrium is represented by the intersection of the vertical long run aggregrate supply function (LRAS), and the downward sloping aggregate demand function (AD). The short run equilibrium is represented by the intersection of the upward sloping short run aggregate supply function (SRAS), and the downward sloping aggregate demand function (AD). (See the diagram on the left panel.)
Question: If a recession were to occur as a result of an inward shift in the AD function (see the diagram on the right panel), the result is: A) A decrease in the average price level (P), and an increase in real GDP (Y). B) An increase in the average price level (P), and an increase in real GDP (Y). C) An increase in the average price level (P), and a decrease in real GDP (Y). D) A decrease in the average price level (P), and a decrease in real GDP (Y). E) No change in the average price level (P), and no change in real GDP (Y).
Life insurance companies often give applicants a physical examination to prevent
A) the person from dying before obtaining the policy. B) signaling. C) adverse selection. D) profit maximization.
An industry is in ________ if firms have an incentive to enter or exit in the ________ run.
A. equilibrium; long B. equilibrium; short C. disequilibrium; long D. disequilibrium; short