One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired.
B. prices tend to adjust more quickly downward than upward.
C. wages are sticky downward.
D. input prices increase with output prices.
Answer: C
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Sue's Surfboards is the sole renter of surfboards on Big Wave Island. Sues demand and marginal revenue curves are illustrated in the figure above. Sue's Surfboards currently rents 15 surfboards an hour. Sue's total revenue from the 15 surfboards is
A) $300. B) $225. C) $150. D) $10.
The maximum price that a buyer will pay for a good is called
a. consumer surplus. b. willingness to pay. c. equilibrium. d. efficiency.
Within a game theory model, if a change in decision-making raises firm A's profits by $1 million and lowers firm B's profits by $1 million, the game is a
A. zero-sum game. B. cooperative game. C. positive-sum game. D. negative-sum game.
If the government spending multiplier were 3.5, a $2 billion decrease in government spending would lower GDP by
A. $7 billion after one year. B. $2 billion after two years. C. $70 billion after one year. D. $1.5 billion after one year.