Figure 7.2
Refer to Figure 7.2. Assume that Ashley faces budget line AB with her $60 income. Then the opportunity cost to her of a book is:
A. one hamburger.
B. two hamburgers.
C. three hamburgers.
D. four hamburgers.
Answer: B
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Refer to the above figure. Suppose the economy's initial equilibrium is represented by the intersection of LRAS1 and AD1
Suppose there is a persistent reduction in labor force participation, which reduces total planned production at any given price level. The resulting change in the economy's long-run equilibrium position would be represented by a A) movement from B to C. B) movement from C to A. C) movement from A to B. D) movement from A to C.
Assume that the average salary for male professors at a university was $110,000 and the average salary for female professors at the same university was $95,000 . Based on this information, can we conclude that this university engages in gender discrimination? Why or why not?
The government should only provide a pure public good if ________ and ________.
A. the good's benefits exceed its costs; there is no less costly way to provide it B. the good is indeed a public good; the majority of voters want it to be provided C. voters desire the good; no new taxes will be needed D. the good's benefits exceed its costs; the government can afford to provide the good
Keynesian economics predicts that if government policy makers deem current equilibrium real Gross Domestic Product (GDP) to be "too low," then an appropriate policy action would be to
A. raise government spending, thereby increasing aggregate demand and pushing up real Gross Domestic Product (GDP) with little or no inflationary consequences. B. reduce the money stock, thereby causing aggregate demand to decrease and inducing a rise in fall in the price level that generates an increase in total planned expenditures. C. do nothing, because the economy is self-adjusting. D. increase taxes, thereby causing aggregate demand to increase and inducing a rise in real Gross Domestic Product (GDP) with little or no inflationary consequences.