The position of the long-run aggregate supply curve corresponds to the economy's:
A. full-employment real GDP.
B. maximum possible level of employment.
C. natural level of personal consumption expenditure.
D. maximum possible level of personal consumption expenditures.
Answer: A
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The market demand for wheat is Q = 100 - 2p + 1pb + 2Y. If the price of wheat, p, is $2, and the price of barley, pb, is $3, and income, Y, is $1000, the income elasticity of wheat
A) is 2 ? (1000/2099). B) is 2. C) is 1/2 ? (1000/2099). D) cannot be calculated from the information provided.
The Apple iPhone is sold in a box labeled "Made in China," but a study by economists at the Asian Development Bank found that the actual percentage of the price of the iPhone accounted for by the only work done in China, which is assembly, is
A) 4 percent. B) 12 percent. C) 25 percent. D) 65 percent.
Suppose external benefits are present in a market which results in the actual market price of $49 and market output of 800 units. How does this outcome compare to the efficient, ideal equilibrium?
a. The efficient price would be higher than $49. b. The efficient price would be lower than $49. c. The efficient price would also be $49. d. The efficient output would be less than 800 units.
In the short run, we assume that the number of firms in a perfectly competitive market:
A. varies if perfect information is present. B. is fixed. C. is equal to the number of firms in the long-run. D. varies more than the long-run equilibrium.