The figure above shows the market supply and market demand curves for pizza. If the market is at its equilibrium, what area in the graph above represents:
a) consumer surplus?
b) producer surplus?
a) AFB
b) BFC
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According to the "self-correcting mechanism" in the AD-AS framework, ________
A) the aggregate demand curve shifts up or down as needed to bring the economy to full employment B) the inflation rate changes as needed to move the economy along the short-run aggregate supply curve until output is at potential output C) the long-run aggregate supply curve shifts until it intersects both the aggregate demand and short-run aggregate supply curves at a single point D) inflation and expected inflation are unaffected by deviations of output from potential output E) none of the above
The government requires the steel industry to adopt new eco-friendly machines, which cannot be used in other industries. If the machines are very expensive and the capital market does not work efficiently, then
A) entrants are encouraged to enter the market and adopt the new machines. B) firms can easily leave the steel industry without loss. C) entrants are discouraged by the new requirements. D) None of the above.
The introduction of money market substitutes for basic checking accounts was fueled partially by the:
A. high number of bank failures that were occurring in the 1970s. B. relatively high rates of inflation that existed in the late 1970s and early 1980s. C. reluctance of many retailers to accept checks. D. higher interest rates banks had to pay on checking accounts.
Suppose the manager of a restaurant notices that when she has too many waiters on the floor for a shift that the waiters get in each other's way and fewer dinners are served. This is an example of
A. diminishing marginal inputs. B. diminishing marginal workforce. C. diminishing marginal product. D. diminishing marginal utility.