In a simplified circular flow model with no government, in equilibrium, S = I + (X ? IM).
Answer the following statement true (T) or false (F)
True
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Economic growth means people produce
A) money. B) material things. C) whatever people value. D) only durable and high-quality goods.
Cindy discovers that when she goes to the beach, she does not have to bring her radio. She can put her blanket near someone who has a radio and listen all day (without having to carry her radio, get sand in her speakers, or buy new batteries). She's delighted. This is an example of
a. private property abuse b. an externality cost to the person who has the radio c. a negative externality enjoyed by Cindy d. a positive externality enjoyed by Cindy e. a public good
Draw a picture to illustrate why total surplus is highest at the competitive equilibrium price and not at a price below equilibrium. Explain your diagram.
What will be an ideal response?
At the equilibrium price,
A. quantity demanded exceeds quantity supplied. B. quantity demanded equals quantity supplied. C. quantity demanded is unrelated to quantity supplied. D. quantity demanded is less than quantity supplied.