The demand curve in the perfectly competitive industry
A. is identical to the firm’s demand curve.
B. negatively sloped.
C. positively sloped.
D. perfectly elastic.
Answer: B
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From the economic point of view, why will an avid downhill skier devote many hours to reading, comparing, and testing a new pair of ski boots but only a few hours to deciding who to vote for in the state senator race?
A) Ski boots are ultimately more important to society than state senators. B) He needs new ski boots; he does not need a new state senator. C) In his estimation, being highly informed about ski boots is a better use of his time compared to being highly informed about potential state senators. D) He is selfish.
Refer to Figure 8.3. Holding other variables constant, if the economy is originally in equilibrium at the intersection of D2 and S2 and households increase their preference for leisure over labor, the economy would move to the new equilibrium point
represented by A) w1 and L2. B) w3 and L2. C) w2 and L2. D) w2 and L1.
Which of the following would NOT cause a shift in the IS curve?
A) an increase in the domestic real interest rate B) an increase in consumer confidence C) a decrease in the expected future profitability of capital D) a decrease in government purchases
An unanticipated shift to a more expansionary monetary policy that permanently increases the rate of inflation from 2 to 6 percent will
a. reduce unemployment in the short run, but unemployment will return to the natural rate in the long run. b. reduce unemployment in the short run, but unemployment will exceed the natural rate in the long run. c. increase unemployment in the short run, but unemployment will return to the natural rate in the long run. d. exert an unpredictable impact on unemployment in the short run, but unemployment will return to the natural rate in the long run.