Refer to Exhibit 9-5. Point G on graph (2) would correspond to the intersection of an AD curve and a SRAS curve at which point(s) on graph (1)?
A) I or J
B) K
C) L or M
D) I or L
E) J or M
Answer: D) I or L
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Huey and Steve can grow potatoes or tomatoes. The table above shows the pounds of potatoes and tomatoes Huey and Steve can grow in a week. Based on the table, which of the following statements is correct?
A) Steve has a comparative advantage in both potatoes and tomatoes. B) Huey has an absolute advantage in potatoes only. C) Steve has an absolute advantage in both potatoes and tomatoes. D) Huey has an absolute advantage in both potatoes and tomatoes. E) Steve has an absolute advantage in potatoes only.
A decrease in government expenditure shifts the AD curve ________ and a decrease in taxes shifts the AD curve ________
A) rightward; rightward B) rightward; leftward C) leftward; rightward D) leftward; leftward
When a shortage exists in a market
A) the market clearing price is above equilibrium and market forces will cause the price to fall. B) the quantity demanded is less than the quantity supplied at the existing price. C) the current price is below the market clearing price and the price will rise. D) the quantity supplied is greater than the quantity demanded at the current price.
For all goods, the long run demand curve is always more elastic than the short run demand curve
Indicate whether the statement is true or false