Ceteris paribus, if the price of jet fuel rose, what effect would it have on the market for air travel?
a. an increase in equilibrium price and an increase in equilibrium quantity.
b. an increase in equilibrium price and a decrease in equilibrium quantity.
c. a decrease in equilibrium price and an increase in equilibrium quantity.
d. a decrease in equilibrium price and a decrease in equilibrium quantity.
b
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Suppose real GDP is $12.6 trillion and potential GDP is $12.4 trillion. To move the economy back to potential GDP, Congress should
A) raise taxes by $200 billion. B) lower government purchases by an amount less than $200 billion. C) lower government purchases by $200 billion. D) raise taxes by an amount more than $200 billion. E) lower taxes by $200 billion.
Suppose your donut shop earns $24,000 in total revenues per month with explicit costs of $12,000 and opportunity costs of $8,000. Your accounting profit is
A) $16,000. B) $12,000. C) $4,000. D) zero.