Refer to the accompanying figure. Suppose the solid line represents the current supply of Star Wars action figures. If retailers learn that a new Star Wars movie will be released in several months, this news is likely to cause:
A. a decrease in the quantity supplied, but no change in current supply.
B. current supply to shift to S(B) in anticipation of higher future prices.
C. neither a change in supply nor a change in quantity supplied since only future demand will change.
D. current supply to shift to S(A) in anticipation of higher future prices.
Answer: D
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The interest-rate effect is the impact on real GDP caused by the inverse relationship between the price level and the interest rate
a. True b. False Indicate whether the statement is true or false
In recent years, net interest on the national debt paid by the federal government as a percentage of GDP is equal to approximately:
a. 1 to 3 percent. b. 5 to 9 percent. c. 10 to 14 percent. d. 15 to 19 percent. e. 20-25 percent.
An example of peak pricing is charging
A. more for long-distance phone calls in the daytime. B. less for electricity at night. C. more for public transportation in rush hours. D. All of the above are true.
When price exceeds average variable cost in the short run, a competitive firm's marginal cost curve is regarded as its supply curve because
a. the position of the marginal cost curve determines the price for which the firm should sell its product. b. among the various cost curves, the marginal cost curve is the only one that slopes upward. c. the marginal cost curve determines the quantity of output the firm is willing to supply at any price. d. the firm is aware that marginal revenue must exceed marginal cost in order for profit to be maximized.