Utility possibility frontier shows:
a. the possible combinations of utility that an efficient bargain can get the negotiating parties.
b. the exact bargain at which the negotiating parties eventually arrive.
c. the highest utility each negotiating party can individually achieve.
d. the possible combinations that maximize payoffs to the negotiating parties.
A
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When actual output exceeds potential output, there is ________ output gap and the inflation rate will ________.
A. an expansionary; be lower than the expected rate of inflation B. no; be equal to the expected rate of inflation C. an expansionary; exceed the expected rate of inflation D. a recessionary; exceed the expected rate of inflation
Explain the capture hypothesis
What will be an ideal response?
According to the graph shown, if the market is in equilibrium, total surplus is area(s):
A. A.
B. A + B + C.
C. A + B + C + D + E.
D. D + E.
If income falls 4 percent for a year and as a result the quantity of new homes demanded falls from 23 million to 20 million units for the year, the value of the income elasticity of demand for new homes is closest to
A. 3.5. B. 2.9. C. 0.6. D. 1.8.