An application of behavioral economics is:
A. rational cost-price decision making.
B. price inconsistency.
C. forgetting the fungibility of money.
D. All of these are applications of behavioral economics.
Answer: C
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The figure above shows the costs and demand curves for the Bigshow Cable Company. If the regulator of Bigshow Cable Company set its price at $4, the company would
A) receive a producer surplus equal to $18 million. B) make zero economic profit. C) incur an economic loss of $7 million. D) none of the above.
A current account deficit implies that
A) the country is a net lender with the rest of the world. B) the country is running a net capital account surplus. C) foreign investment in domestic securities is at very low levels. D) All of the above.
A simple two-sector circular flow diagram illustrates the flow of resources between: a. the rest of the world and firms. b. government and firms
c. households and government. d. households and firms.
When there is overproduction in a market,
A. there is excess quantity demanded. B. the total of consumer and producer surplus is maximized. C. market price is too low. D. there is a deadweight loss.