An example of an aggregate supply shock is
A. inflation caused by a surge in demand.
B. the reduction of oil supply by the OPEC nations in the early 1970s.
C. the increase in ice-cream sales every summer.
D. the decrease in the labor force due to the baby-boomer generation reaching working age.
Answer: B
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An increase in Swiss prices will cause
A) an increase in the demand for U.S. dollars and an increase in the exchange rate of Swiss francs per dollar. B) a decrease in the demand for U.S. dollars and a decrease in the exchange rate of Swiss francs per dollar. C) an increase in the supply of U.S. dollars and a decrease in the exchange rate of Swiss francs per dollar. D) a decrease in the supply of U.S. dollars and an increase in the exchange rate of Swiss francs per dollar.
Explain the rules for finding maximum profit using total revenue and total cost and marginal revenue and marginal cost.
What will be an ideal response?
If an individual's utility function is quasi-concave, his or her MRS will:
a. diminish as x is substituted for y. b. increase as x is substituted for y. c. be undefined except in special cases. d. always depend only on the ratio of x to y.
Figure 11-3
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In Figure 11-3, if person 1 and person 2 have the indicated quantities of cheese and crackers and are on the indicated indifference curves, is there the possibility of mutually beneficial trade? Explain.
What will be an ideal response?