In understanding and analyzing "market demand," we focus on how much all buyers are
A. willing and wanting to buy at different prices.
B. willing and able to buy with their given income.
C. willing and able to buy at different prices.
D. actually buying now and in the recent past at various prices.
Answer: C
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Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted. Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Industrio ($/day) $350$400$500$700$1,000 Cost to Capitalista
($/day) $225$250$290$400 $600Suppose the government decides to sell 6 permits allowing a total of 6 tons of pollution. The government starts the bidding with an opening price of $30. What happens next? A. A total of five permits will be demanded, forcing the government to lower the price. B. A total of seven permits will be demanded, forcing the government to raise the price. C. Industrio will demand 3 permits and Capitalista will demand 3 permits. D. Industrio will purchase all available permits at $30.
If it is not possible to increase the output of one good without decreasing the output of the other, when there are only two goods, then
A. this situation would describe a point on a production possibilities frontier for the producer. B. the outcome can be described as efficient. C. there is no unemployment of resources. D. All of these outcomes are correct.
GDP understates the amount of economic production in the United States because it excludes ________.
A. spending for the U.S. military B. purchases of stocks and bonds C. work performed by households for their own benefit D. transfer payments
DSGE models are
A. similar to RBC models, but government spending shocks play a major role. B. similar to Keynesian models except in the long run. C. similar to RBC models but allow for shocks other than productivity shocks. D. similar to Keynesian models except in the short run.