A market
a. is often a physical place
b. facilitates exchanges between buyers and sellers
c. typically involves monetary transactions
d. might not have well-defined geographical limits
e. all of the above
E
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California passed a law called “Proposition 2 ½” that limited property taxes to 2.5 percent of property value. Naturally this reduced taxes on many properties, and apartment landlords had more money at the end of the year at given rents. This windfall could be called an economic rent only if
A. we push the definition of economic rent too far. B. the supply of rental units can be expanded. C. the supply of rental units is fixed. D. competitors can build housing at costs that yield the return that was earned before the tax cut.
Consider the accompanying payoff matrix.
If both firms offer reduced rates, each earns ________, and if both firms keep their rates high, each earns ________.
A. 500; 300 B. 300; 50 C. 50; 300 D. 300; 500
Exhibit 9-1 GDP and consumption data GDP Consumption Aggregate Expenditures Unplanned inventory $0 $0.5 1 1.0 2 1.5 3 2.0 4 2.5 5 3.0 6 3.5 7 4.0 8 4.5 As shown in Exhibit 9-1, if investment is $0.5 trillion, government spending is $1 trillion, net exports are ?$0.5 trillion, and GDP is $2 trillion, then:
A. inventory depletion is ?$1.5 trillion. B. inventory accumulation is ?$2.0 trillion. C. inventory depletion is ?$0.5 trillion. D. inventory accumulation is $0.5 trillion.
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward