In Table 9.3, Market 2 would be in equilibrium if buyers believed plums account for:
A. about 16.67% of the market.
B. about 33.33% of the market.
C. about 66.67% of the market.
D. about 88.89% of the market.
Answer: B
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Under market capitalism, resources are allocated primarily through
a. government decree b. voter consensus c. tradition d. lottery e. prices
A good example of the government commandeering resources is
a. government subsidizing road construction b. the Pharaohs building the pyramids c. Bill Gates creating Windows 95 with a government issued patent d. Thomas Edison inventing the light bulb e. government taxing Disneyland
Which of the following is most likely to result in inflation?
a. Aggregate demand and aggregate supply grow at the same rate. b. Neither aggregate demand nor aggregate supply grows at all. c. Aggregate supply grows more rapidly than aggregate demand. d. Aggregate demand grows more rapidly than aggregate supply.
The analysis of Friedman and Phelps can be summarized in the following equation where a is a positive number:
a. Unemployment Rate = Natural Rate of Unemployment - a(Actual Inflation - Expected Inflation). b. Unemployment Rate = Natural Rate of Unemployment - a(Expected Inflation - Actual Inflation). c. Unemployment Rate = Expected Rate of Inflation - a(Actual Inflation - Expected Inflation). d. Unemployment Rate = Actual Rate of Inflation - a(Actual Unemployment - Expected Unemployment).