Real business cycle theory emphasizes the role of:
A. demand shocks as a cause of economic fluctuations.
B. technology shocks as a cause of economic fluctuations.
C. shocks to the money supply as a cause of economic fluctuations.
D. government spending as a cause of economic fluctuations.
Answer: B
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Kristen has an income of $450 per year to spend on music CDs and movies on DVDs. Initially the price of a CD is $15 and the price of a DVD is $22.50. The indifference curves in the figure above (I1, I2, and I3 ) reflect Kristen's preferences
If the price of a DVD falls to $18, Kristen will buy A) 10 DVDs and 15 CDs per year. B) 15 DVDs and 12 CDs per year. C) 12.5 DVDs and 11 CDs per year. D) 13 DVDs and 15 CDs per year.
If smartwatches are considered substitutes for smartphones, the decline in the price of smartphones would, all else equal,
A) decrease the demand for smartwatches. B) increase the demand for smartwatches. C) increase the quantity of smartwatches demanded. D) decrease the quantity of smartwatches demanded.
The effective rate of protection is a weighted average of nominal tariffs and tariffs on imported inputs
It has been noted that in most industrialized countries, the nominal tariffs on raw materials or intermediate components or products are lower than on final-stage products meant for final markets. Why would countries design their tariff structures in this manner? Who tends to be helped, and who is harmed by this cascading tariff structure?
A consumer values a car at $30,000 and a producer values the same car at $20,000 . The transaction will not take place if a tax is imposed
a. equal to the seller surplus b. smaller than the total surplus c. larger than the total surplus d. smaller than the buyer surplus