One reason why an economy may not smoothly adjust to a macroeconomic shock is that
A) prices are flexible in the long run.
B) prices are sticky in the short run.
C) wages are sticky in the long run.
D) prices and wages are sticky in the long run.
B
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Mexico and the members of OPEC produce crude oil. Realizing that it would be in their best interests to form an agreement on production goals, a meeting is arranged and an informal, verbal agreement is reached. If both Mexico and OPEC abide by the agreement, then OPEC's profit will be $200 million and Mexico's profit will be $100 million. If both Mexico and OPEC cheat on the agreement, then OPEC's profit will be $175 million and Mexico's profit will be $80 million. If only OPEC cheats, then OPEC's profit will be $185 million, and Mexico's profit will be $60 million. If only Mexico cheats, then Mexico's profit will be $110 million, and OPEC's profit will be $150 million. You may find it helpful to fill in the payoff matrix below. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q236g1.jpg" alt="" style="vertical-align: 0.0px;" height="203" width="377" />To Mexico, the payoff to cheating is either:
A. $80 million or $110 million.
B. $60 million or $100 million.
C. $100 million or $110 million.
D. $150 million or $200 million.
Which of the following would not be studied by macroeconomists?
A. The effects of tax cuts on consumer spending. B. Factors affecting average wages in the U.S. economy. C. Inflation in developing countries. D. The worldwide operations of General Motors
What is consumer surplus? How is it measured?
What will be an ideal response?
Which of the following is a potential result of a price ceiling?
A) excess supply B) long lines C) higher quality output D) higher marginal costs