Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If 20,000 units of iced tea are sold
A) the marginal benefit of each of the 20,000 units of iced tea equals $3.
B) producer surplus equals consumer surplus.
C) marginal benefit is equal to marginal cost.
D) the deadweight loss is equal to economic surplus.
C
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When foreign residents buy U.S. Treasury securities to finance the budget deficit
A) we can also anticipate a decrease in the trade deficit. B) the trade deficit will not be affected. C) we can also anticipate an increase in the trade deficit. D) the public debt will be reduced.
When an economy is temporarily operating at an output that is beyond its full-employment rate,
a. excess supply in resource markets will eventually lead to lower resource prices, which will decrease costs and direct the economy toward full employment. b. excess demand in resource markets will lead to higher resource prices, which will increase costs and direct the economy toward full employment. c. lower wages and prices will quickly restore full employment. d. only restrictive fiscal policy will direct the economy back to full employment.