An economist says: "The demand curve has two interpretations." What does the economist mean?
What will be an ideal response?
The first interpretation is that the demand curve shows the quantities of a good or service that consumers are willing and able to buy at each price, other things being equal. The second interpretation is that the demand curve is a willingness-and-ability-to-pay curve, so that for each quantity it shows the highest price that someone is willing and able to pay for one more unit.
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A bank may make loans until its
A) total liabilities are exhausted. B) excess reserves are exhausted. C) total assets are exhausted. D) required reserves are exhausted.
How are final goods and services valued when measuring nominal GDP?
A) at producer cost B) at base year prices C) at foreign exchange parity D) at current market prices E) at factor market prices
A surplus in the labor market indicates that the
A) real wage rate is above the equilibrium wage rate but it is too low to eliminate the surplus of labor. B) quantity of labor demanded is less than the quantity of labor supplied. C) real wage rate has to rise before the labor market will reach equilibrium. D) workers are not looking for work because they enjoy their leisure time. E) real wage rate is less than the equilibrium wage rate.
Relative to the supply curve of high-skilled workers, the supply curve of low-skilled workers is
A) to the right. B) above. C) to the left. D) on top of the high-skilled worker supply curve.