Assume a perfectly competitive constant-cost industry is initially at long-run equilibrium. Now suppose that a decrease in market demand occurs. After all the long-run adjustments have been completed, the new equilibrium price
A. will be the same as the initial price, and the output will be less.
B. will be less than the initial price, but the new output will be greater.
C. will be greater than the initial price, but the new output will be less.
D. and industry output will be less than the initial price and output.
Answer: A
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A consumer maximizes total utility when all available income is spent and the
A) marginal utility from each good is equal for all goods. B) marginal utility per dollar from each good is equal for all goods. C) dollars spent on the last unit of each good are equal for all goods. D) total utility from all goods purchased is equal.
When the current state of the economy is such that Real GDP is less than Natural Real GDP, the economy is in a(n) ____________________ gap. In this situation, the (actual) unemployment rate is ___________ than the natural unemployment rate, and there is a ________________ in the labor market
A) recessionary; greater; shortage B) inflationary; less; shortage C) inflationary; greater; surplus D) recessionary; greater; surplus E) recessionary; less; shortage
You have observed that every time you do 30 minutes of cardio exercise before taking an exam you get an A. You therefore conclude that to get an A on an exam, all you have to do is 30 minutes of cardio exercise before you take an exam. You have committed the
A. post hoc, ergo propter hoc fallacy. B. fallacy of division. C. fallacy of inductive reasoning. D. fallacy of logic.
Your textbook presents as an example of a distributed lag regression the effect of the weather on the price of orange juice
The authors mention U.S. income and Australian exports, oil prices and inflation, monetary policy and inflation, and the Phillips curve as other potential candidates for distributed lag regression. You are considering estimating the effect of minimum wages on teenage employment (employment population ratio) using a time series of U.S. data. Write a short essay on whether a distributed lag model would be a suitable tool to figure out dynamic causal effects in this case. What will be an ideal response?