Explain how the short-run industry supply curve for a perfectly competitive market is derived
At any given price, the quantities supplied by individual firms are simply added. The resulting curve is a horizontal summation of all the individual firms' supply curves.
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When actual output is less than potential output, there is ________ output gap and the rate of inflation will tend to ________.
A. an expansionary; increase B. a recessionary; increase C. an expansionary; decrease D. a recessionary; decrease
Samara's income is $30 a month and she spends all of it on music downloads and gasoline. The price of a music download is $1.50 and the price of a gallon of gasoline is $3
At Samara's best affordable point, her marginal rate of substitution is ________ per video tape. A) 0.5 of a download B) 1 download C) 1.5 downloads D) 2 downloads
China has developed a comparative advantage in the production of clothing. The source of this comparative advantage is
A) investment in capital used to produce clothing. B) a large supply of natural resources. C) a large supply of unskilled workers and relatively little capital. D) superior process technology.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and nominal value of the domestic currency rises. b. There is not enough information to determine what happens to these two macroeconomic variables. c. The real risk-free interest rate rises, and nominal value of the domestic currency remains the same. d. The real risk-free interest rate falls, and nominal value of the domestic currency falls. e. The real risk-free interest rate rises, and nominal value of the domestic currency falls.