Explain the differences between aggregate demand shocks and aggregate supply shocks
What will be an ideal response?
Aggregate demand shocks are changes which cause the aggregate demand curve to shift. Aggregate demand shocks cause expenditures to change. Aggregate supply shocks are changes which cause the aggregate supply curve to shift. Aggregate supply shocks cause costs of production to change.
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Answer the following statement(s) true (T) or false (F)
1. A Paasche price index makes price changes seem better for the consumer than they really are. 2. A Laspeyres price index is based on the basket consumed in the later period.. 3. If the consumer has the same tax bill under a head tax as under an income tax, then the consumer will be indifferent between the two taxes. 4. If the consumer has the same tax bill under a head tax as under an income tax, then less leisure will be consumed under the head tax than under the income tax. 5. The cardinal utility approach has exactly the same implications as the indifference curve approach.
Who gains from a law requiring people who want to enter the taxicab business to prove they are thoroughly competent, honest, and reliable before they can obtain a license?
A) Local people who use taxicabs frequently and regularly B) Local people who use taxicabs only occasionally C) Out-of-town visitors who use taxicabs D) Owners of taxicab licenses E) Potential owners and operators of taxicabs who are members of minority races
The law of diminishing returns causes a firm's short-run marginal cost curve to be s-shaped
a. True b. False Indicate whether the statement is true or false
Refer to Scenario 7.7 below to answer the question(s) that follow. SCENARIO 7.7: A lawn service company has the following production possibilities. With one, two, three, and four workers, the company can mow 4, 9, 12, and 14 lawns per day, respectively. Refer to Scenario 7.7. The marginal product of the third worker is
A. 2. B. 3. C. 4. D. 12.