Producer surplus is the difference between:
a. what the producer is willing to receive and what the consumer must actually pay to receive a good or service.
b. what the producer actually receives for a good or service and what the producer is willing to receive
c. what the consumer is willing to pay and what the consumer must actually pay to receive a good or service.
d. the quantity of goods a producer is willing to and the quantity of goods the consumer actually buys.
b
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If the price of good X (measured on the horizontal axis of a budget line diagram) increases at the same time that the price of good Y (measured on the vertical axis) decreases, the budget line
a. will become flatter b. will become steeper c. could become either steeper or flatter, depending on the sizes of the price changes d. will rotate about its original point of intersection with the horizontal axis e. will shift outward, but not in a parallel fashion
If the Fed were to enter the foreign exchange market and purchase euros, the impact on domestic banking reserves would be:
A. domestic banking reserves would decrease. B. the same as it would be with an open market purchase. C. the opposite of what it would be with an open market purchase. D. uncertain.
Policymakers may be uncertain about the state of the economy because
A. initial releases of data may be less accurate than later data releases. B. they are not aware of modern macroeconomic modeling techniques. C. they don't know the predominant source of shocks to the economy. D. they don't know how shocks affect people's expectations.
Assume that a consumer purchases a combination of product A and product B such that the MUa/Pa = 8 and MUb/Pb = 6. To maximize utility without spending more money, the consumer should:
A. Purchase less of product A and more of product B B. Purchase more of product A and less of product B C. Purchase more of both product A and product B D. Make no change in purchases of products A and B