In the Early 1980s, Many People Found Themselves Unable to Purchase

question 24

Multiple Choice

In the early 1980s, many people found themselves unable to purchase new homes because of

• A) rising prices and interest rates.
• B) rising prices and falling interest rates.
• C) new government restrictions on mortgages for first-time buyers.
• D) increases in income tax rates.

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good or service and the higher market price they actually receive.

Economic Profit

Economic profit is the difference between total revenue and total costs, including both explicit and implicit costs, measuring the performance exceeding the opportunity costs of resources used.

Fixed Costs

Expenses that do not change with the level of production or business activity within a certain range or period.

Short-Run Marginal Cost Curve

A graph that shows the cost of producing one more unit of a good or service in the short term, when some factors of production are fixed.