Suppose that demand for a product falls, but prices are sticky. What is likely to happen to prices and output in that market, in the short run?
What will be an ideal response?
If prices are not flexible, they may not immediately adjust downward in response to the decrease in demand. So in the short run, prices may stay constant, and output might fall by more than would have happened if prices were flexible.
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The Scarcity Principle states that:
A. society will eventually run out of resources. B. some countries have fewer resources than others. C. with limited resources, having more of one thing means having less of another. D. people don't have enough money to buy what they want.
Labor force participation rates tend to
A. be unrelated to education level for both men and women. B. be unrelated to education level for men but to increase with education level for women. C. decrease with education level for men but to increase with education level for women. D. decrease with education level for both men and women. E. increase with education level for both men and women.
The supply of known Monet paintings is:
A. perfectly elastic. B. perfectly inelastic. C. relatively elastic. D. relatively inelastic.
On January 1, 2010, Alex deposited $5,000 into a savings account that pays interest of 5 percent, compounded annually. If he makes no further deposits or withdrawals, how much will Alex have in his account on December 31, 2012 (3 years later)?
A. $5,750. B. $5,788. C. $5,813. D. $5,825.