Refer to Figure 4-3. If the market price is $2.50, what is the consumer surplus on the third ice cream cone?
A) $0 B) $0.50 C) $1.50 D) $2.50
A
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The structural deficit or surplus
a. shows the government where to make cuts in expenditures to follow the balanced budget requirement. b. reveals the complicated structure underlying government spending and tax policy. c. is the hypothetical deficit or surplus under current fiscal policies if the economy were operating near full employment. d. includes all government budgets-federal, state, and local.
Answer the following statements true (T) or false (F)
1) Refer to the diagram. If this represents a typical firm in the industry and the firm is producing at the profit-maximizing level of output in the short run, then in the long run we would expect more firms to enter the market.
2) Refer to the diagram. If this represents a typical firm in the industry and the firm is producing at the profit-maximizing level of output in the short run, then in the long run we would expect economic profits in this market to rise.
3)Refer to the diagram. If this firm is producing at the profit-maximizing level of output in the short run, then it is achieving productive and allocative efficiency.
