When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease.
B. prices, causing them to definitely rise.
C. output, causing it to definitely increase.
D. prices, causing them to definitely fall.
Answer: A
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The Rule of 70 is used to
A) estimate how much of an economy's growth rate is due to increases in capital per hour of labor. B) calculate the standard of living. C) calculate the economy's growth rate. D) estimate how long it will take the level of any variable to double.
Leisure is an inferior good for Assel. In response to an increase in the wage rate, she will
A) supply fewer hours of labor. B) supply more hours of labor. C) enjoy more hours of leisure. D) None of the above.
The graph illustrates the demand curve for soda. After a rise in the price of a soda from $1.00 a can to $2.00 a can, the quantity of soda demanded
A) decreases from 2 cans to 0 cans a day. B) increases from 0 cans to 2 cans a day. C) remains unchanged. D) decreases from 1 can to 0 cans a day. E) cannot be determined from the figure because the demand curve will shift to a new curve.
The marginal revenue product of labor is defined as
A) the change in the firm's output as a result of hiring one more worker. B) the change in the firm's revenue as a result of selling one more unit of output. C) the change in the firm's profit as a result of hiring one more worker. D) the change in the firm's revenue as a result of hiring one more worker.