In Figure 32.1, at the supported price-quantity combination where production is limited, the value to consumers is 
A. 0PfloorBQD.
B. 0ABQD.
C. 0HCQ*.
D. 0P*CQ*.
Answer: B
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A bank receives new deposits equal to $200,000 and the desired reserve ratio is 10 percent. What is the amount of new loans the bank can make?
What will be an ideal response?
Which of the following is a short-run adjustment?
a. Toyota builds an automobile plant in Kentucky. b. Faced with increasing enrollment, a private college builds a new School of Business building. c. Because of staggering losses, three insurance companies exit the industry. d. People's Bank hires two new tellers to meet increased demand for customer services. e. Shaveco enters the razor blade market with a new product, produced in the United States.
Suppose that, given the same number of workers, the United States can produce two times as many TVs or 20 times as many potatoes as Chile. Which of the following statements is true?
A. Chile should trade with the United States for potatoes because the United States has an absolute advantage in the production of potatoes. B. Chile should trade with the United States for TVs because the United States has an absolute advantage in the production of potatoes. C. The United States can benefit from trading TVs but not potatoes with Chile. D. The United States has absolute advantage in producing both goods.
For most goods, the real-income effect of a price change is
A) small because the good accounts for a small part of the consumer's budget. B) small because the decision to buy a good depends only on the income of a consumer. C) large because the price of the good is in terms of the currency and the income of the person is also in terms of the currency. D) zero because the real-income effect only applies to durable goods.