Suppose that a new drug has been approved to treat a life-threatening disease. The demand for that drug is shown on the accompanying graph. Prior to approval of this drug, the only treatment for this condition was any one of several non-prescription, or over-the-counter, pain relievers. The demand for one brand of the several non-prescription pain relievers is also shown on the graph.
If the manufacturer of the new drug chose to increase its price from $70 to $75, consumers would buy ________ doses, and have ________ total expenditures.
A. more; higher
B. more; lower
C. fewer; lower
D. fewer; higher
Answer: C
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Which of the following goods is most likely to be over consumed?
A. Fish in the ocean B. Chickens on a farm C. Horses on a ranch D. Water from a reservoir
Other things remaining equal, total factor productivity will fall if _____
a. labor input grows more slowly than total output b. capital input grows faster than total output c. the economy's output divided by total inputs increases d. the ratio of total output to the stock of labor and capital changes by zero percent e. the ratio of total output to the stock of labor and capital increases
In early 2010 Molly paid $200,000 for a house built in 2000 . She spent $30,000 on new materials to remodel the house. Although Molly lived in the house after she remodeled it, its rental value rose. Which of the following contributed to real GDP in 2010?
a. the price of the house, the cost of remodeling materials, the increase in rental value b. the price of the house and the cost of remodeling materials, but not the increase in rental value c. the costs of the remodeling materials and the increase in rent, but not the price of the house d. None of the above are correct.
Jack has an MPC of 0.82 and Jill has an MPC of 0.78. Ceteris paribus, if the government transfers income from people who behave like Jack to people who behave like Jill,
A. Aggregate demand will increase. B. Aggregate demand will decrease. C. It is not possible to predict what will happen to aggregate demand. D. Aggregate demand will remain the same.