Which of the following will result in a decrease in demand for residential housing in the short run?
A) a decrease in the price of lumber
B) an increase in the wages of carpenters
C) a decrease in real household incomes
D) a decrease in the prices of residential housing
C
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A multi-plant firm has three plants and, at its current production levels, the marginal cost of production at each of the three plants is $2.00. If the firm is perfectly competitive and the market price of its product is $5, which of the following is true?
A) The firm should exactly triple output in each of the plants to maximize profit. B) The firm is not producing the profit-maximizing total output. C) The firm is producing the profit-maximizing total output. D) The firm should increase output at each of the plants to maximize profit.
If the economy experiences a recessionary gap then:
a. aggregate expenditures exceed the level of spending necessary to provide for full employment. b. Keynesian economics would recommend a reduction in government spending or an increase in taxes. c. Keynesian economics would recommend an increase in government spending or a decrease in taxes. d. the equilibrium level of output and income is above full employment.
The infant industry argument is that:
a. those industries that produce products for infants should be protected. b. protectionism will provide consumers with lower prices. c. protectionism should be used to create a level playing field for the domestic firms to compete with foreign firms. d. protectionism promotes complete specialization in the country on the basis of comparative advantage. e. new industries should be protected from foreign competition until they have had adequate time to develop.
The belief by most economists that real and nominal variables are essentially determined separately in the long run is characteristic of the ________ model.
a) aggregate demand b) classical c) Keynesian d) aggregate supply