The above figure shows the U.S. market for wheat. With international trade, consumer surplus is equal to ________
A) area A + area B + area C
B) area E + area F
C) area B + area C + area D
D) area A + area B + area C + area D
E) area A
E
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The schedule of tolls capable of maximizing the net revenue of a bridge owner
A) has no relationship to the cost of constructing the bridge. B) is the highest anyone will pay rather than forgo the opportunity to cross the bridge. C) varies proportionately to the cost of constructing the bridge. D) will be higher than the corresponding tolls for a tunnel, because tunnel construction costs must be sunk rather than elevated.
If production of a good creates an external cost, the amount of output where the marginal social benefit equals the marginal private cost is
A) inefficient. B) inequitable. C) unattainable. D) efficient.
In the long run, perfectly competitive firms typically do not earn any economic profit
a. True b. False
Answer the following statement(s) true (T) or false (F)
1. If a government collects more taxes than it spends, there is a budget deficit. 2. Firms and households create the demand for loanable funds. 3. Both the supply and the demand curves of loanable funds are negatively sloped. 4. A low saving rate makes more money available for investment. 5. Early in the twenty-first century, it was common for people to get mortgages with no down payment and minimal documentation.