Surplus refers to:
A. the difference between the willingness to sell and the actual price accepted.
B. the difference between the willingness to pay and the actual price paid.
C. the difference between the price at which a buyer or seller would be willing to trade and the actual price.
D. All of these are true.
Answer: D
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Suppose that a company produces at a point where its MR is $430 and its MC is $105, this implies that
a. the firm earns a total profit of $325 at that output level b. the firm’s total costs are rising faster than its total revenue c. the firm’s total profit is rising, suggesting that the firm should expand production d. each unit of output generates an average profit of $325
Explain what a black market is and how it functions. What is a black market generally a response to?
What will be an ideal response?
According to the classical model, a 10-percent increase in the money supply, holding everything else constant, will lead to
a. a 10% increase in prices, a 10% increase in the real wage, and a 10% increase in interest rates. b. a 10% increase in prices, a 10% increase in the money wage, and a 10% increase in interest rates. c. a 10% increase in prices, a 10% increase in the money wage, and no change in interest rates. d. a 10% increase in prices and no change in the money wage or interest rates. e. none of the above.
The Fed would engage in ____ it wanted to address an inflationary gap
a. expansionary monetary policy b. contractionary monetary policy c. contractionary fiscal policy d. expansionary fiscal policy