How do changes in expectations, fiscal policy and monetary policy, and the world economy change aggregate demand and the aggregate demand curve?
What will be an ideal response?
Aggregate demand increases and the AD curve shifts rightward if: expected future income, expected future inflation, or expected future profits increase; government expenditure increases or taxes are cut; the quantity of money increases and the interest rate is cut; the exchange rate falls; or foreigners' income increases. The reverse changes decrease aggregate demand and shift the AD curve leftward.
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A firm pays Pam $40 per hour to assemble personal computers. Each day, Pam can assemble 4 computers if she works 1 hour, 7 computers if she works 2 hours, 9 computers if she works 3 hours, and 10 computers if she works 4 hours. Pam cannot work more than 4 hours day. Each computer consists of a motherboard, a hard drive, a case, a monitor, a keyboard, and a mouse. The total cost of these parts is $600 per computer. If the firm sells each computer for $650, then how many hours a day should the firm employ Pam to maximize its net benefit from her employment?
A. 4 hours B. 3 hours C. 2 hours D. 1 hour
The Navigation Acts (1651 and later amendments) were part of the contemporary European commercial policy theory called
(a) laissez-faire. (b) mercantilism. (c) commercialism. (d) classical liberalism.
Figure 11-5
Crown Theater is the only movie theater in the city. Its cost and revenue curves are shown in Figure 11-5. Monopolist Crown Theater would set the price of its tickets at
a.
$7.50.
b.
$6.00.
c.
$4.50.
d.
$3.00.
Assume that a retailer sells 800 six packs of Dr. Pepper per day at a price of $3.00/six-pack. You, as an economic analyst, estimate that the cross-price elasticity between Dr. Pepper and Coca-Cola is 0.6. If the retailer raises the price of Coca-Cola by
10%, how would the sales of Dr. Pepper be affected, ceteris paribus? A) Sales of Dr. Pepper would rise by 48 six-packs B) Sales of Dr. Pepper would rise by 10% C) Sales of Dr. Pepper would fall by 48 six-packs D) None of the above