When the economy experiences a permanent supply side shock that shifts the long-run aggregate supply to the right, the short run aggregate supply curve will:
A. instantly shift left with the long-run aggregate supply to the new long-run equilibrium.
B. begin by shifting left initially, and then be pulled right by the long-run aggregate supply over time.
C. gradually shift right until it reaches long-run aggregate supply and the new long-run equilibrium.
D. None of these is true.
C. gradually shift right until it reaches long-run aggregate supply and the new long-run equilibrium.
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In the nation of Transporta, the income elasticity of demand for used cars is -2.66. So when incomes in this nation increase by 10 percent
A) the quantity of used cars demanded will increase by 26.6 percent. B) used cars will be normal goods. C) the quantity of used cars demanded will decrease by 26.6 percent. D) the demand curve for used cars will shift rightward.
Household production is more likely to occur when
a. it requires many specialized resources b. technology makes it more costly than market production c. tax avoidance is undesirable d. less control over the final product is desirable e. the opportunity cost of household work is relatively small
The circular-flow diagram is a
a. visual model of the economy. b. visual model of the relationships among money, prices, and businesses. c. model that shows the effects of government on the economy. d. mathematical model of how the economy works.
Examples of employment discrimination would include
A. the legendary Negro league pitcher Satchel Paige who was not allowed to pitch in the major leagues until he was in his late 40s. B. the large majority of women in the 1950s and 1960s who were typists or secretaries. C. the attitude that typing, filing and other clerical positions were "women's work". D. all of the examples are true.