In principle, we would expect the aggregate demand curve to be vertical because the price level is a reference point, the actual value of which should not matter.
Answer the following statement true (T) or false (F)
True
The price level is only a numeraire, a reference point. If prices and wages all doubled simultaneously and evenly, you would be no better or worse off.
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A tax on firms for polluting will be most effective in reducing pollution at low cost if the tax
A) is levied on a one-time, lump-sum basis. B) per unit of pollutant is constant. C) per unit of pollutant is lower for low polluting firms. D) per unit of pollutant is proportioned to profits or ability to pay.
Figure 17-4
In , the equilibrium price of Dominican pesos is Pe. If the Dominican Republic government fixes the price of foreign currency in terms of domestic currency at Pf (below equilibrium), what does the quantity Qd through Qs represent?
a.
the quantity of Dominican exports
b.
a shortage of foreign exchange
c.
the quantity of Dominican imports
d.
a surplus of foreign exchange
If a firm is operating in a monopolistically competitive market, then in the long run:
A. the firm will earn a zero economic profit. B. the firm will maximize its profit by producing the output level at which the average cost is minimized. C. the firm will maximize its profit by producing the output level at which the marginal revenue is minimized. D. All of these
Suppose a vote was taken among 7 district representatives about how much of the city budget should be spent on tourism advertising. Two prefer it to be 10 percent, two prefer 15 percent, and three prefer 50 percent. According to the median voter theorem, the chosen amount to spend on tourism advertising is ________ of the budget.
A. 15 % B. 50 % C. 10 % D. 30 %