Suppose the domestic supply (QS) and demand (QD) for MP3 players in the United States is represented by the following set of equations:QS = -25 + 10PQD = 875 - 5PThe consumer surplus will ________ by ________ when the United States engages in international trade and the international price for MP3 players settles at $50.
A. increase; $6,000
B. decrease; $7,150
C. decrease; $13,500
D. increase; $2,625
Answer: A
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The figure below shows the supply and demand curves for jeans in Smallville. 
The equilibrium price will NOT lead to the largest possible total economic surplus if:
A. there are diminishing returns in the production of jeans. B. jeans are purchased by consumers with reservation prices greater than $40. C. the production of jeans generates air pollution. D. the market for jeans is perfectly competitive.
The combination of psychology and economics to determine individual decision making is known as
A) behavioral economics. B) psychonomics. C) the rule of thumb. D) positive analysis.
Which of the following statements is NOT true?
A. The supply of money decreases when the Federal Reserve Banks buy government securities from households or businesses. B. Excess reserves are the amount by which actual reserves exceed required reserves. C. Commercial banks increase the supply of money when they purchase government bonds from households or businesses. D. Commercial bank reserves are an asset to commercial banks but a liability to the Federal Reserve Banks.
The economic functions of the government deal with
A. making sure supply equal demand. B. excess demand. C. promoting economic efficiency. D. discouraging smoking in youths.