We derive the demand curve for X from indifference curves and a budget constraint by changing the
A. consumers? preferences.
B. price of X.
C. price of Y.
D. level of income.
Answer: B
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Which of the following are NOT included among Gordon's criticisms of Friedman's fooling model?
A) Workers buy many goods on a weekly basis and thus could discover quite quickly that prices had risen. B) Workers could discover movements in the aggregate price level fairly easily. C) The model relied on a non-market-clearing explanation of the labor market. D) Workers would predict higher prices if policies that led to higher prices in the past were used again.
The equilibrium effects of a temporary increase in government spending include
A) an increase in the real wage and an increase in the real interest rate. B) an increase in the real wage and a decrease in the real interest rate. C) a decrease in the real wage and an increase in the real interest rate. D) a decrease in the real wage and a decrease in the real interest rate.
Jim saw a decrease in the quantity demanded for his firm's product from 8000 to 6000 units a week when he raised the price of the product from $200 to $250 . What is Jim's own price elasticity of demand?
a. 1.29 b. 1 c. 0.25 d. 0.78
Economic analysis suggests that gains from specialization and exchange
a. will not be realized unless a central planning authority requires that all goods be produced by the low opportunity cost supplier. b. will be realized if individuals are allowed to pursue goals that are in their own self-interest. c. will not be realized unless business firms employ economists when making decisions about the proper combination of resources to utilize in the production process. d. will be realized if individuals place the public interest above the pursuit of their own self-interest.