A surplus means a(n):
a. excess demand for this product.
b. situation where the current market price is too low.
c. situation where the quantity demanded exceeds the quantity supplied.
d. situation where the quantity supplied is less than the quantity demanded.
e. excess supply of the product at the current price.
e
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If a consumer's demand curve as constant own-price elasticity of -2, the consumer's spending will fall as price increases.
Answer the following statement true (T) or false (F)
Decisions to cut taxes are made by ________ and are an example of ________ policy.
A. Congress; fiscal B. the President; monetary C. the Federal Reserve; fiscal D. Congress; monetary
Country X is a small country, with demand and supply functions for the food grains:QD = 150 - 0.6PQS = -40 + 0.5P where QD and QS are in millions of tons and P is the price per ton. The world price of grain is $200 per ton. a. In a situation of free trade, how much food grains would be produced, consumed, and traded in Country X?b. As a response to alleged unfair foreign practices, Country X farmers successfully lobby for a $20 export subsidy per ton of the grains exported. Assuming that imports of food grains are banned, show graphically and explain the impact of the export subsidy on domestic prices, consumption, production, and exports of grain by this country. Also indicate, using your graph, the effects on well-being of domestic producers and consumers and the cost of the
subsidy to the government, as well as the net change in well-being in Country X. For each of these changes, calculate the money amount of each of the changes in well-being and government cost. What will be an ideal response?
Answer the next question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$450$425$2,000Year 25004503,000Year 36005004,000Year 46406205,000Year 56805804,800Year 66006205,000A budget surplus occurred in
A. Year 2. B. Year 3. C. Year 4. D. Year 6.