Assume that there is rent control in Chicago. Which of the following is true?
A) All consumers in the rental market will benefit because the rent will be lower.
B) The total surplus will fall because there will be a shortage of apartments.
C) The total surplus will rise because consumer surplus will increase.
D) Consumer surplus will increase and as a result all consumers in the rental market will benefit.
Answer: B) The total surplus will fall because there will be a shortage of apartments.
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Refer to Figure 9.1. Assume the economy is initially at point A. The initial change resulting from a recession caused by an increase in oil prices is best represented by which short-run equilibrium combination of price level and real GDP?
A) P2; Y2 B) P3; Y3 C) P2; Y3 D) P3; Y2
The reason why countries should specialise in producing a certain product for export is explained by:
(a) The Law of Comparative Advantage; (b) The Law of Absolute Advantage; (c) Both (a) and (b) above. (d) None of the above
On a graph for the Gini Coefficient, the Gini Coefficient is calculated by ______.
a. multiplying area A by area B b. dividing area A by area B c. multiplying area A by area A + B d. dividing area A by area A + B
In most developed economies, unemployment insurance benefits
a) are nonexistent b) paid for by insurance companies c) initially replace 100% of lost wages d) replace an increasing percentage of lost earnings as the duration of unemployment becomes prolonged e) become less generous as the duration of unemployment is prolonged