Use the figure below to answer the following question.
If a price ceiling in this market is set at P1, then producer surplus equals area
A. c.
B. b + c.
C. b.
D. c + b + d.
Answer: A
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Moving along the production possibilities frontier itself illustrates
A) the existence of tradeoffs. B) the existence of unemployment of some factors of production. C) the benefits of free lunches. D) how free lunches can be exploited through trade. E) how tradeoffs need not occur if the economy is efficient.
If units of pizza are plotted on the horizontal axis, and units of hot dogs plotted on the vertical axis, and the price of a hot dog increases the
A) x-intercept and the slope of the budget line will increase. B) y-intercept and the slope of the budget line will increase. C) x-intercept and the slope of the budget line will decrease. D) y-intercept and the slope of the budget line will decrease.
When a perfectly competitive, well-functioning market is not in equilibrium:
A. total surplus can be increased by a change in market price. B. the market is not efficient. C. there are exchanges that can make some better off without someone becoming worse off. D. All of these are true.
There are 12 Federal Reserve Banks in the Federal Reserve System
a. True b. False Indicate whether the statement is true or false