On the 45-degree line diagram, the 45-degree line shows points where
A) real aggregate expenditure equals real GDP.
B) real aggregate expenditure equals C + I.
C) real income equals real GDP.
D) real aggregate output equals the quantity produced.
A
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Workers and firms both expect that prices will be 3% higher next year than they are this year. As a result
A) workers will be willing to take lower wages next year. B) the purchasing power of wages will rise if wages increase by 3%. C) the short-run aggregate supply curve will shift to the left as wages increase. D) aggregate demand will increase by 3%.
Answer the following statements true (T) or false (F)
1. A state government seeking to increase its excise-tax revenues is more likely to increase the tax rate on items with elastic demand. 2. The demand for cocaine among addicts is relatively elastic. 3. The law of supply indicates that the price-elasticity of supply coefficient would have a negative sign. 4. The price elasticity of supply determines how much price as a result of a change in demand. 5. Over a longer time period after a price-change, the price elasticity of supply tends to decrease.
Normative statements
i. describe how the world is. ii. describe how the world ought to be. iii. depend on people's values and cannot be tested. A) ii only. B) i and iii. C) iii only. D) i only. E) ii and iii.
A market has ten firms, whose market shares are given in the table above
a) If firms I and J wanted to merge, according to the Department of Justice guidelines, would the Department of Justice challenge the merger? b) If firms A and B wanted to merge, according to the Department of Justice guidelines, would the Department of Justice challenge the merger?