What are the three distinct sections of the aggregate supply curve? What does each section imply about the relationship between output and prices?
At low levels of output, the aggregate supply curve is horizontal, reflecting the fact that there are unemployed resources in the economy. As output rises along this segment, prices remain constant. For mid- levels of output, the aggregate supply curve is upward-sloping, illustrating a positive relationship between output and prices. Finally, the last segment of the aggregate supply curve is vertical. The economy is at full-employment output, and only prices can rise when there are further shifts in aggregate demand.
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Which of the following is true of a Nash equilibrium?
A) A game can have only one Nash equilibrium. B) No player can improve his payoff by changing his strategy once in Nash equilibrium. C) A Nash equilibrium cannot occur if each player is aware of the strategies of other players. D) A Nash equilibrium occurs if each player earns a zero payoff irrespective of the strategy he chooses.
Consider the market for dollars. If the exchange rate rises from 2 pesos per dollar to 4 pesos per dollar
A) the supply curve of dollars shifts leftward. B) the supply curve of dollars shifts rightward. C) there is an upward movement along the supply curve for dollars. D) there is a downward movement along the supply curve for dollars.
Swing shift Your firm prints the novelty baseball cards that candy makers include in their bubblegum. Since you regularly sell 100,000 cards per week, you invested in four separate production lines that can each produce 25,000 cards in a standard 40
hour work week. Now a few of the candy makers are increasing their orders so that you will need to produce 150,000 cards per week, at least temporarily. If you produce these cards by adding a swing shift from 4pm to midnight, you will have to pay workers time and a half. What does this imply for the shape of your short-run marginal cost curve? What does it imply for your pricing?
As we approached the end of the millennium, many economic crackpots advised citizens to hold large quantities of cash in anticipation of Y2K disasters. What effect would this have had on velocity if many people had been foolish enough to follow this advice?
a. It would have decreased. b. It would have increased. c. It would have remained constant. d. Velocity is unrelated to cash balances.