If the AD curve is vertical, a positive cost shock will cause ________ in output and ________ in the price level.
A. no change; an increase
B. a decrease; no change
C. a decrease; an increase
D. no change; no change
Answer: A
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At prices above a consumer’s reservation price:
A. the opportunity cost is less than the benefit from having the good. B. the opportunity cost is greater than the benefit from having the good. C. the buyer will purchase the good. D. the willingness to pay is greater than the price.
If all other factors are held constant, an increase in imports
A. can cause Gross Domestic Product (GDP) to increase or decrease, depending on whether the imports are purchased by consumers or by business firms. B. causes Gross Domestic Product (GDP) to increase. C. causes Gross Domestic Product (GDP) to decrease. D. causes an increase in exports of the same size.
The demand for Dell laptops is more price elastic than the demand for laptops as a whole. This can be best explained by the fact that
a. There are fewer substitutes for Dell laptops than for laptops as whole b. There are more substitutes for Dell laptops than for laptops as whole c. Dell laptops are luxurious goods d. Dell laptops are a necessity
Daryn and Nick work for two different companies, but each performs the same job working on a loading dock. Daryn, however, earns a higher salary than his friend Nick The difference in salary could illustrate union wages if Daryn's annual salary is covered by a collective bargaining agreement and Nick's is not
a. True b. False Indicate whether the statement is true or false