The U.S. Postal Service printed 150,000 sheets of a stamp depicting Bill Pickett, but recalled them when the USPS realized the image on the stamp was Bill's brother, Ben, instead. They were unable to recall 183 sheets that had already been sold. The effect of this recall was to:
A. drastically reduce the supply of the Bill Pickett stamps, causing their equilibrium price to fall.
B. have no effect on either supply of or demand for the Bill Pickett stamps because there is no market for them.
C. drastically reduce the supply of the Bill Pickett stamps, causing their equilibrium price to rise.
D. drastically reduce the demand for the stamps, causing their equilibrium price to fall.
Answer: C
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A) shift the FE line to the right and leave the IS curve unchanged. B) shift the FE line to the left and shift the IS curve up and to the right. C) shift the FE line to the left and leave the IS curve unchanged. D) have no effect on the FE line.
The total producer surplus enjoyed by all sellers in a market
a. exceeds the market price b. is measured by the area below the market supply curve c. is called market producer surplus d. is the area below the market demand curve minus the area below the market supply curve e. is the area below the market supply curve minus the area below the market price
Given U.S. tax laws, persistently high inflation may result in
a. They increase growth because particulates provide an additional carbon source b. faster economic growth because the after-tax real interest rate is higher. c. slower economic growth because the after-tax nominal interest rate is lower. d. faster economic growth because the after-tax nominal interest rate is higher.
Which of the following is true concerning IRA's, 401(k) and 403(b) plans?
a. Not everyone is eligible to put funds into them. b. There are restrictions on the amount of funds that can be put into them. c. Except under unusual circumstances, there are penalties for withdrawals before retirement. d. All of the above are correct.