A year-long drought that destroys most wheat crops for the season would shift the:
A. short-run aggregate supply curve only.
B. aggregate demand curve only.
C. aggregate demand curve, and the short-run aggregate supply curve would shift in response.
D. short-run aggregate supply curve and the long-run aggregate supply curve.
Answer: A
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A diagram that shows the maximum amount of one type of good that can be produced in an economy, given the production of the other is known as
A) an indifference curve. B) the tradeoff schedule. C) the production possibility frontier. D) the balance of trade.
In Figure 5.8, if the supply curve moves from S3 to S5,
A. the firm will make a smaller economic profit than they used to. B. the firm will go from making a normal profit to a loss but one that is not big enough to make it want to shutdown. C. the firm will go from making an economic profit to a normal profit. D. the firm will go from making a normal profit to a loss that is big enough to make it want to shutdown.
Suppose when the price of calculators is $18, the quantity demanded is 90, and when the price is $22, the quantity demanded drops to 70. Using the mid-point method, the price elasticity of demand is:
A. -25 B. - 1.25 C. - 20 percent D. - 25 percent
Based on a World Bank study, medical treatment in developing countries has an elasticity value greater than 1.
Answer the following statement true (T) or false (F)