The above figure shows a labor market with minimum wage equal to $16. In this figure, what area equals the firms' surplus?
A) area A
B) area B
C) area C
D) area D
E) area E
A
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Compare and contrast Say's views of the macroeconomy with that of Keynes. What does each have to say about the economy in relationship to its potential level of real GDP?
What will be an ideal response?
Price elasticity of demand is a numerical measure of how much quantity demanded rises as price falls or quantity demanded falls as price rises.
Answer the following statement true (T) or false (F)
Why are laws aimed at regulating monopolies called "antitrust" laws?
A) "Trust" was a word in Old English that meant monopoly in the Middle Ages. Therefore, "antitrust" is a term that means "against monopoly." B) In the late 1800s, firms in several industries formed trusts; they were called "trusts" because when corporate officials were questioned about their business they would clam that business was good for the country and that they should trusted. C) The rise of large firms (e.g., Standard Oil) in the late 1800s in the United States caused consumers to lose trust in private business. D) In the late 1800s, firms in several industries formed trusts; the firms were independent but gave voting control to a board of trustees. Antitrust laws were passed to regulate these trusts.
Explain the short-run effects on output and the price level from a decrease in the aggregate-demand curve