Refer to Figure 11-11. What is the amount of excess capacity?
a. Q4 - Q3 units
b. Q3 - Q2 units
c. Q3 - Q1 units
d. Q4 - Q2 units
Answer: d. Q4 - Q2 units
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When the government develops policies to stabilize the economy
A) only expansionary fiscal policy is impacted by the multiplier effect. B) only contractionary fiscal policy is impacted by the multiplier effect. C) these policies are unaffected by the multiplier effect. D) it needs to consider the multiplier effect for all fiscal policies.
The product approach to calculating GDP
A) adds together the market values of final goods and services produced by domestic and foreign-owned factors of production within the nation in some time period. B) includes the market value of goods and services produced by households for their own consumption but excludes the value of the underground economy. C) is superior to the income approach because, unlike the income approach, it gives us the real value of output. D) adds together the market values of final goods, intermediate goods, and goods added to inventories.
One barrier to entry into a monopoly market is:
A. the ownership of a key resource or input. B. too many competitors already in the market. C. high input costs. D. few buyers.
The condition in an economy that makes a "rationing device" a necessity is:
A) the economy is organized around free markets. B) the economy is centrally planned by the government. C) scarcity exists. D) there are fewer types of goods than there are people in the economy.