Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2.
B. P2 and Y3.
C. P3 and Y1.
D. P2 and Y2.
Answer: B
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The above figure shows how many pounds of peanuts farmers are willing to sell at different prices per pound of peanuts. If the price of a pound of peanuts is $1 and the price of a pound of pecans is $2, peanut farmers are willing to sell
A) no peanuts. B) 1000 pounds of peanuts. C) 2000 pounds of peanuts. D) 4000 pounds of peanuts.
Jaime’s cross price elasticity of science fiction and mystery novels is -4. This means that the novels are
a. compliments. b. normal. c. substitutes. d. inferior.
Which of the following statements concerning saving is true?
A. A country's saving rate is unrelated to its growth rate. B. A country's growth rate is unrelated to its national income. C. An increase in the rate of saving will lead to a reduction in consumption in the short run and in the long run. D. An increase in the rate of saving decreases gross domestic income by reducing current consumption but increases current and future gross domestic income through investment in capital goods.
Assume that corn and cloth are each produced using both land and labor in a country. Corn is relatively land-intensive. If the country experiences an increase in its endowment of labor, product prices remaining unchanged, the Rybczynski theorem predicts that the production of corn will decline.
Answer the following statement true (T) or false (F)