If consumption is $8 billion, investments is $4 billion, government purchases are $2 billion, imports are $1 billion, and exports are $2 billion, GDP must equal:
A. $17 billion.
B. $14 billion.
C. $15 billion.
D. $16 billion.
Answer: C
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If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then the consumer surplus will be
A) $0. B) $8 million. C) $16 million. D) $32 million.
An example of a moral hazard would be Andrew leaving the washer, dryer, and dishwasher running at home while he goes to class since he is fully insured and he will not be at risk if a fire occurs
a. True b. False
If an economy is operating at a point inside the production possibilities curve,
a. its resources are not being used efficiently. b. the curve will begin to shift inward. c. the curve will begin to shift outward. d. This is a trick question because an economy cannot produce at a point inside the curve.
When Cabbage Patch Dolls were introduced, they were extremely popular at Christmas, and most stores sold out. By the next year, there were plenty still available at Christmas. What happened?