A drought destroys much of the peach crop. As a result, consumer surplus in the peach market:
a. increases. b. decreases.
c. remains unchanged. d. equals the deadweight loss increase.
b
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By 2010, the U.S. economy had emerged from the recession that had begun in 2007. Despite an economic growth rate well above zero, unemployment showed little sign of declining much below ten percent
Focusing on the definition of the unemployment rate, explain how it is possible to have positive economic growth without declining unemployment.
Coffee prices fell in the 1990s because of:
a. subsidies by developed countries to their coffee producers. b. subsidies by developing countries to their coffee producers. c. new suppliers in Brazil and Vietnam. d. a fall in world demand for coffee.
When marginal cost is greater than marginal benefit at the current activity level, the decision maker can increase net benefit by decreasing the activity because
A. net benefit is upward sloping at this point. B. total cost will fall by more than total benefit will fall. C. marginal cost is rising faster than marginal benefit is falling. D. total benefit will rise by more than total cost will rise.
Recognition lags in fiscal policy stem largely from
A) the fact that it takes time before a fiscal policy, such as a change in government purchases or a change in taxes, is agreed to and put into effect. B) the fact that it takes time for a policy action to have its full effect on aggregate demand. C) the difficulty of collecting economic data in a timely and accurate fashion. D) households and businesses may not respond to fiscal policy to the extent that policy makers had hoped, for example, they may not be as responsive to a tax cut .