The aggregate-demand curve
a) has a slope that is explained in the same way as the slope of the demand curve for a particular product.
b) is vertical in the long run.
c) shows an inverse relation between the price level and the quantity of all goods and services demanded.
d) All of the above are correct.
Ans: c) shows an inverse relation between the price level and the quantity of all goods and services demanded.
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Answer the following statement(s) true (T) or false (F)
1. The Pareto criterion is a criterion under which any proposal that can be unanimously defeated should be rejected. 2. To be effective, a price ceiling needs only to be enforced. 3. If a tax and a price control have the same effect on the price paid by consumers, then the two policies will create the same deadweight loss. 4. Consumers will benefit from a tariff, because it helps domestic firms and generates revenue for the government. 5. The value of a good is ultimately determined by the amount of labor needed to produce the good.
Natural monopolies are the natural result of:
A. geographical happenstance. B. government regulations intended to encourage competition. C. competition in markets where economies of scale exist over the relevant range of output. D. fierce competition from firms in a market.
A waitress brings a free glass of wine when you sit down in a restaurant. This glass of wine is
A) a service because the waitress carried it instead of making it. B) a good, but not an economic good because there is no price charged for the wine. C) a nongood because there is no price charged for the wine. D) an economic good because wine is produced with scarce resources, even if it is free to you.
The demand for microwaves in a certain country is given by: D = 8,000 -30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. If this economy opens to trade while the world price of a microwave is $50, how many microwaves will be imported or exported?
A. 2,000 imported B. 2,000 exported C. 1,000 imported D. 3,000 exported