In the above figure, if aggregate demand does not change, the short-run equilibrium will
A) eventually adjust to a long-run equilibrium with a higher price level.
B) not adjust on its own.
C) eventually adjust to a long-run equilibrium with a lower price level.
D) None of the above answers are correct.
C
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Refer to the scenario above. The housekeeper's behavior is an example of a ________
A) moral hazard B) positive externality C) prisoners' dilemma D) tragedy of the commons
If the good in the table above is a public good and Pat and all are the only members of society, then the efficient quantity to produce is
A) 2 units. B) 3 units. C) 4 units. D) 5 units.
China's prosperity brings income gap The Asian Development Bank [ADB] reports that China has the largest gap between the rich and the poor in Asia
Ifzal Ali, the ADB's chief economist, claims it is not that the rich are getting richer and the poor are getting poorer, but that the rich are getting richer faster than the poor. Source: Financial Times, August 9, 2007 Explain how the distribution of personal income in China can be getting more unequal even though the poorest 20 percent are getting richer.
Which set of changes is definitely predicted to raise the price level in the short run?
A) The money supply falls and wage rates rise. B) The money supply falls and wage rates fall. C) The money supply rises and wage rates fall. D) Labor productivity rises and there is a beneficial supply shock. E) The prices of nonlabor inputs rise and individuals expect higher (future) incomes.