Suppose an economist develops a theory that higher food prices arise from higher gas prices. According to the scientific method, which of the following is the economist's next step?
a. Collect and analyze data.
b. Go to a laboratory and generate data to test the theory.
c. Publish the theory without testing it.
d. Consult with other economists to see they agree with the theory.
a
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If the economy is operating on the long-run aggregate supply curve, then expansionary fiscal policy will
A. generate an increase in real GDP without higher prices in the short run, but then real GDP will return to its long-run level, and the price level will increase. B. generate higher prices in the short run, but will induce aggregate supply to increase in the long run. C. generate an increase in real GDP and higher prices in both the short run and the long run. D. generate an increase in real GDP and higher prices in the short run, but then real GDP will decrease to its long-run level, and the price level will increase some more.
Consider a society consisting of just a farmer and a tailor. The farmer has 10 units of food but no clothing. The tailor has 20 units of clothing but no food. Suppose each has the utility function U = F ? C. The price of clothing is always $1. If the price of food is $3, does a competitive equilibrium exist? If not, what will happen to the price of food?
What will be an ideal response?
Voss Calculator Company has a monopoly on the sale of graphing calculators. If it sells two of these calculators its total revenue is $500, and if it sells three calculators its total revenue is $700. The marginal revenue of the third calculator sold is
A. $100. B. $150. C. $200. D. $700.
Installing an air purifier or a water filtration system is an example of a(n)
a. direct estimation method b. ozone-reducing policy c. physical linkage approach d. averting action