Suppose OPEC oil cartel announces that it will increase production of oil. Using supply and demand analysis to predict the effect of increased production on equilibrium price and quantity, the first step is to show the:
A. demand curve shifting to the right.
B. supply curve shifting to the right.
C. demand curve shifting to the left.
D. supply curve shifting to the left.
Answer: B
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To separate the income and substitute effects, the imaginary budget line should be
A) tangent to the new indifference curve and parallel to the new budget line. B) tangent to the new indifference curve and parallel to the old budget line. C) tangent to the old indifference curve and parallel to the new budget line. D) tangent to the old indifference curve and parallel to the old budget line.
The money price of a good is also known as its
A) relative price. B) case price. C) absolute price. D) subjective price.
Which of the following will result in a leftward shift of the market supply curve for labor?
a. an increase in immigration b. a decrease in labor productivity c. an increase in the working-age population d. an increase in nonwage income
Under adaptive expectations, the short-term effect of an unanticipated shift to a more expansionary macroeconomic policy will be a
a. temporary reduction in the unemployment rate. b. permanent reduction in the unemployment rate. c. temporary reduction in the inflation rate. d. permanent reduction in the inflation rate.