In the above figure, starting at E1, if there is a supply shock that is permanent, the
A. aggregate supply would shift to SRAS1 and LRAS0 would shift to LRAS1.
B. aggregate supply would shift to SRAS1 and LRAS1 would shift to LRAS0.
C. aggregate supply would shift to SRAS2 and LRAS0 would shift to LRAS1.
D. aggregate supply would shift to SRAS1 and then return to SRAS0.
Answer: C
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The table above has the domestic demand and domestic supply schedules for a good. According to the table, the no-trade price of the good is
A) $4. B) $6. C) $8. D) $10. E) $2.
Andy can't make a deal with Danny. Andy has a Alex Rodriguez baseball card and would like to trade it to Danny for Danny's Albert Pujols card, but Danny doesn't want a Alex Rodriquez card
Andy's problem illustrates the drawback to a barter system known as A) the specialization problem. B) the double coincidence of wants problem. C) the many prices problem. D) the transactions problem.
Public goods
A) are overproduced by unrestrained markets. B) are simply private goods that the government provides. C) cannot be consumed by more than one person without the degradation of the value of the good. D) can be consumed by more than one person without degradation of the value of the good.
A tax would not impose a welfare cost only if: a. the quantity exchanged did not change as a result. b. supply was perfectly elastic
c. supply was unit elastic. d. the demand curve was perfectly elastic.