A subsidy to wheat farmers reduces the price of a bushel of wheat from $2.50 to $2 per bushel. The equilibrium quantity of wheat sold prior to the subsidy was equal to 200,000 bushels. Predict the new equilibrium quantity of wheat after the imposition of the subsidy given that the demand for wheat is known to be unit elastic

A trade surplus occurs when

A) the value of imports is greater than the value of exports. B) government spending is less than total tax revenue. C) consumption is greater than disposable income. D) none of the above.

Which of the following is NOT a factor that increases short-run price stickiness?

A. Consumers tend to prefer stable prices B. Stable prices make it easier for consumers to plan their spending C. A firm can lower its price without fear that rival firms will also lower their prices D. Firms try to avoid price wars