Suppose you are graphing the quantity of bagels on the vertical axis and the quantity of coffee on the horizontal axis. A household's real income in terms of bagels is the
A) relative price of coffee.
B) relative price of bagels.
C) point at which the budget line intersects the x-axis.
D) point at which the budget line intersects the y-axis.
D
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For a firm in perfect competition, a diagram shows quantity on the horizontal axis and both the firm's marginal cost (MC) and its marginal revenue (MR) on the vertical axis. The firm's profit-maximizing quantity occurs at the point where the
A) slope of the MC curve is zero. B) MC and MR curves are parallel. C) MC curve intersects the MR curve from below, going from left to right. D) MC curve intersects the MR curve from above, going from left to right.
Refer to Figure 4-8. Suppose that instead of a rent ceiling, the government imposed a price floor of $2,000 per month for apartments. What is the value of consumer surplus after the imposition of the price floor?
A) $6,000 B) $30,000 C) $100,000 D) $240,000
If an investor is certain that market interest rates will decline in the future, which of the following will she be most likely to purchase?
A) a six-month government bill B) a two-year government note C) a ten-year government bond D) a fifty-year government bond
Refer to the tables below. Assume that prior to specialization and trade Germany and the United States both choose production possibility C. Now if each specializes according to its comparative advantage, the resulting gains from specialization and trade will be:
Autos and chemicals are in million of units in the following production possibilities tables:
A. 8 million units of autos
B. 6 million units of autos
C. 6 million units of autos and 8 million units of chemicals
D. 8 million units of autos and 6 million units of chemicals