With reference to the graph above, if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers:
A. then the policy was effective since consumers gained in surplus overall.
B. then the policy was ineffective since consumers gained in surplus overall.
C. then the policy was ineffective since consumers lost surplus overall.
D. then the policy was effective since consumers lost surplus overall.
Answer: v
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
In general, with a monopolist's outcome:
A. consumers lose surplus. B. monopolies earn profit. C. deadweight loss occurs. D. All of these statements are true.
The basic difference between macroeconomics and microeconomics is that: a. microeconomics looks at aggregate markets while macroeconomics is concerned with individual markets. b. macroeconomics is concerned with policy decisions while microeconomics applies only to theory
c. microeconomics is concerned with individual markets while macroeconomics is concerned with aggregate markets. d. macroeconomics is concerned with positive economics while microeconomics is concerned with normative economics.
Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit.Table 19.3Michael's Utility ScheduleUnits of ColaTU of ColaMU of ColaUnits of PretzelsTU of PretzelsMU of Pretzels14040130302 322 2039624366164112 478 5124 584 Refer to Table 19.3. If Michael has $28 dollars to spend, why will three colas and four pretzels not be optimal?
A. This combination is affordable but does not maximize utility. B. This combination has less total utility. C. This combination has less marginal utility per dollar. D. This combination is not affordable.