The income effect of a wage increase is expected to increase
A. supply of labor.
B. supply of goods and services.
C. demand for leisure.
D. demand for labor.
Answer: C
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When a rent ceiling is ________, consumer surplus and producer surplus shrink, a deadweight loss ________, and resources are lost in search activity and evading the rent ceiling law
A) inefficient; arises B) inefficient; disappears C) efficient; arises D) efficient; disappears E) nonexistent; arises
If the Federal Reserve targets the interest rate and the money demand curve shifts to the left, then the Fed
A) can maintain the interest rate target, but at a higher quantity of the money supply. B) cannot maintain the interest rate target. C) can maintain the interest rate target with no change in the money supply. D) can maintain the interest rate target, but at a lower quantity of the money supply.
A major weakness of the kinked demand curve model is that it does not explain how the equilibrium price, i.e., the price at the kink in the demand curve, is determined
Indicate whether the statement is true or false
In Europe during the 14th century, the Black Plague killed 24 million people or close to 37 percent of the population. How would this affect the production possibilities curves for the countries of Europe at that time?
A. The production possibilities curves for these countries would have shifted outward. B. The production possibilities curves for these countries would have shifted inward. C. The production possibilities curves for these countries would have been unaffected. D. This would have been illustrated by a movement along the production possibilities curves for these countries, but it would not have shifted them.