In Figure 32.1, at the supported price-quantity combination where production is unlimited, and the government buys the excess, the producer surplus is Image
A. HP*C.
B. APfloorB.
C. HPfloorE.
D. P*AC.
Answer: C
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The natural unemployment rate is 4 percent and the actual unemployment rate is 7 percent. According to Okun's Law, how does of real GDP compare to potential GDP?
What will be an ideal response?
Because the amount of labor a firm employs can be changed, the cost of labor is known as
A) minimum cost. B) variable cost. C) maximum cost. D) fixed cost. E) an unavoidable cost.
Purchasing power parity is the theory that, in the long run, exchange rates move to equalize
A) the relative purchasing power of currencies across countries. B) nominal interest rates across countries. C) real GDP across countries. D) corporate profits across countries.
Which of the following is not true? a. Voluntary exchange is expected to be advantageous to both parties to the exchange
b. What one trader gains from a trade, the other must lose. c. If one party to a potential voluntary trade decides it does not advance his interests, he can veto the potential trade. d. The expectation of gain motivates people to engage in trade.