Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $3
A) economic surplus is maximized.
B) the quantity demanded is economically efficient but the quantity supplied is economically inefficient.
C) too many consumers want to buy iced tea.
D) the quantity supplied is greater than the economically efficient quantity.
D
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If the Fed buys securities worth $10 million, then
A) bank reserves will increase by $10 million. B) bank reserves will decrease by $10 million. C) currency in circulation will increase by $10 million. D) bank holdings of securities increase by $10 million.
When a payroll tax is enacted, the wage received by workers
a. falls, and the wage paid by firms rises. b. falls, and the wage paid by firms falls. c. rises, and the wage paid by firms falls. d. rises, and the wage paid by firms rises.