Which of the following statements accurately describes the growth of this economy?
a. The total spending in the economy grew faster than total production, with a price level change from PL1 to PL2.
b. Long-run economic growth is illustrated by the shift from LRAS2 to LRAS1.
c. The aggregate demand curve shifted from AD2 to AD1 due to increased spending by consumers, firms, and government.
d. The LRAS curve shifted further to the right than did the AD curve.
a. The total spending in the economy grew faster than total production, with a price level change from PL1 to PL2.
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In 2013, the reference base period for the CPI for the nation of Wobet, a typical consumer spent $30 on potatoes and $150 on steak. Which of the following is true?
A) The quantity of steak in the basket is larger than the quantity of potatoes. B) The quantity of potatoes in the basket is larger than the quantity of steak. C) The quantity of the two goods in the basket is the same. D) We cannot say exactly how many of each good are in the basket. E) None of the above answers is correct.
Which of the following is an example of an externality that has been internalized?
A. Acid rain, originating in the United States, destroys Canadian forests. B. Robert Frost breathes the air that has been polluted by the emissions of a nearby steel plant. C. Erica Evans, a beekeeper, decides to keep more bees because her neighbor, an orchard owner, has agreed to compensate her for the bees' pollination of the orchard. D. Miguel Sanchez, a concert pianist, rehearses Beethoven's "Moonlight Sonata" and his neighbors enjoy the "free concert." E. all of the above
Discuss how unions affect prices indirectly.
What will be an ideal response?
The accompanying graph shows the cost curves for Moe's mushroom gathering business, which is perfectly competitive.
If mushrooms sell for $40 per bushel, and Moe chooses the profit-maximizing quantity, he will:
A. earn positive profit. B. earn negative profit (a loss). C. earn zero profit. D. shut down.