The full-employment and full-adjustment level of real Gross Domestic Product (GDP) in the economy is represented by
A) the horizontal line at the price level.
B) the LRAS curve.
C) the distance between the LRAS curve and the AD curve.
D) the AD curve.
B
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Suppose that Pat has the legal right to fly an extremely noisy airplane over Chris's apartment and that he values that right at $1,000 per year. Chris would be willing to pay $1,200 per year to avoid the noise. In that case
a. Pat will be required to eliminate the overflight b. Chris will move to a new apartment c. Pat and Chris have a powerful incentive to agree to eliminate the overflight because both would benefit from it d. some governmental agency will step in to require Pat to choose a different flight pattern e. some governmental agency will require Chris to move to a new apartment
In a perfectly competitive market, a decrease in output could be caused by
a. an increase in consumer demand b. a technological innovation c. a decrease in input prices d. a decrease in consumer demand
What group is committed to lowering trade barriers between nations?
a. United Nations b. European Union c. World Trade Organization d. OPEC
The simple circular-flow model for households and firms is an economic model that focuses on the interaction between households and firms. Which of the following statements regarding the model is correct?
a.) the model is missing the interaction between firms and the resource market. Therefore, it cannot predict well. b.) the model is missing the interaction between households and the product market. Therefore, it cannot predict well c.) the model has too many simplifying assumptions, and it cannot be used to make predictions about the real world d.) the model is a simplification of the real world, and it can be used to make predictions about the real world e.) the model is missing the interaction between firms and the produce market. Therefore, it cannot predict well