Aggregate surplus:
A. is the sum of total willingness to pay and total avoidable costs of production.
B. is minimized under perfect competition.
C. is the sum of consumer and producer surpluses.
D. is equal to zero in the long run.
C. is the sum of consumer and producer surpluses.
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According to the Taylor rule, if inflation in the last year was 6% and output was 2% below its full-employment level, the nominal Fed funds rate should be
A) 3%. B) 5%. C) 7%. D) 9%.
Noah is an unpaid stay-at-home father who is not currently searching for paid work. Pete is a full-time student who is not looking for a job. Who is included in the labor force by the Bureau of Labor Statistics?
a. only Noah b. only Pete c. both Noah and Pete d. neither Noah nor Pete
As a result of a decrease in the price of gasoline, consumers can afford to buy more gasoline for more driving trips. This is an illustration of
A. consumer sovereignty.
B. the substitution effect.
C. diminishing marginal utility.
D. the income effect.
When a monopolist practices price discrimination, compared to a single-price monopolist, producer surplus will:
A. decrease. B. increase. C. increase initially, and then return to its original level. D. remain the same.