Say Anna chooses between partying and studying. Supposed her indifference curves satisfied all the assumptions about consumer theory, but she also liked studying a lot more than partying. If the price of studying increased, then Anna would consume
A. no partying at all, in order to consumer more studying.
B. less studying and more partying.
C. the same as before.
D. more studying and less partying.
Answer: B
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Which of the following is TRUE about the long-run aggregate supply curve?
A) It is vertical at the level of potential GDP. B) It shows the relationship between the price level and real GDP when the economy is at full employment. C) It does not shift in response to temporary changes in aggregate demand. D) All of the above are true.
The cab fare in Horseville is regulated. Recently, the government decided to raise it from $2.00 to $2.50 per ride. After this rise in fare, cab ridership decreased by 10 percent
a) What is the price elasticity of demand for cab rides in Horseville? (Use the midpoint formula to calculate the percentage change in the price.) Is the demand for rides elastic or inelastic? b) According to your estimate, what happened to the cab drivers' revenue after the fare rose? Explain. c) Why might your estimate of elasticity be inaccurate?
If General Motors imports parts from its plants in Canada and Mexico for finished trucks that it will sell across the NAFTA region, what type of trade does this represent?
What will be an ideal response?
Increasing productivity per person:
A. is highly desirable, as it leads to economic growth. B. is unavoidable, and macroeconomists work to prevent it. C. can harm an economy if misallocated. D. is highly undesirable, as it leads to increases in GDP per capita.