Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y2.
C. P3 and Y1.
D. P2 and Y3.
Answer: D
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A unit-elastic demand curve will be concave toward the origin .
Answer the following statement true (T) or false (F)
Because of the "lemons problem" the price a buyer of a used car pays is
A) equal to the price of a lemon. B) less than the price of a lemon. C) equal to the price of a peach. D) between the price of a lemon and a peach.
If there are external benefits associated with the consumption of a good or service:
A. The private demand curve will overestimate the true demand curve B. The private demand curve will underestimate the true demand curve C. Consumers will be willing to pay for all these benefits in private markets D. The market demand curve will be the vertical summation of the individual demand costs
The graph shown demonstrates a tax on sellers. Once the tax has been imposed, the sellers produce ____ units and receive _____ for each one sold.
A. 15; $16
B. 15; $6
C. 31; $9
D. 31; $19