How does a recession in Asia affect U.S. aggregate demand and the U.S. aggregate demand curve?
What will be an ideal response?
A recession in Asia means that Asians purchase fewer U.S.-made goods and services. As a result, U.S. exports decrease so that U.S. aggregate demand decreases and the U.S. aggregate demand curve shifts leftward.
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A firm produces 500 units per week. It hires 20 full-time workers (40 hours/week) at an hourly wage of $15 . Raw materials are ordered weekly and they costs $10 for every unit produced. The weekly cost of the rent payment for the factory is $2,250 . How do the overall costs breakdown?
a. total variable cost is $17,000 . total fixed cost is $2,250; total cost is $19,250 b. total variable cost is $5,000 . total fixed cost is $2,250; total cost is $7,250 c. total variable cost is $5,000 . total fixed cost is $14,250; total cost is $19.250 d. total variable cost is $12,000 . total fixed cost is $7,250; total cost is $19,250
Which statement best characterizes the second-best policy offered by a monopoly insurer when it can't observe the consumer's risk?
a. It is a single contract offering partial insurance at an intermediate price such that all types are served. b. It is a menu of contracts providing full insurance for the least risky types and partial insurance for higher risks. c. It is a menu of contracts providing full insurance for the riskiest type and partial insurance at lower prices for lower risks. d. The market breaks down since the monopolist cannot design contracts without observing each consumer's risk.
According to the Keynesian model, which of the following policies would be most appropriate during a period of rapid inflation?
a. a tax cut b. a budget deficit c. a budget surplus d. an increase in the money supply
What is the name of the mathematical result showing that no voting system can simultaneously satisfy the properties of unanimity, transitivity, independence of irrelevant alternatives, and no dictators?
a. The fundamental theorem of behavioral economics b. Arrow's impossibility theorem c. The fundamental theorem of voting d. The median voter theorem