When output exceeds its full-employment level,
A) the short-run aggregate supply function shifts up.
B) wages fall.
C) the short-run aggregate supply function shifts down.
D) aggregate supply exceeds aggregate demand.
A
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Jack has a ticket to see Daughtry for which he paid $30 yesterday. He takes an unpaid day off from work to get ready for the concert. When he arrives at the concert, five different people offer him $70 for his ticket. Jack decides to keep his ticket. At the time he makes this decision, his opportunity cost of seeing Daughtry is:
A. $70 plus his forgone earnings. B. $30 plus his forgone earnings. C. $70. D. $40.
According to empirical observations, the cost of restricting international trade in the U.S. is much greater than the benefits generated from restriction. In the light of the above observation, which of the following statements is true?
a. Domestic producers end up earning lower profits than what they would earn without trade restrictions. b. Consumers end up paying much more for the goods they buy in order to subsidize the relatively inefficient domestic producer. c. U.S. GDP would be over $14 billion higher with import restrictions than without restrictions. d. Protection of the U.S. textile and sugar industries means that all consumers pay a lower price for clothing and sugar. e. Protection of the domestic industries enable the producers to charge lower prices for their products.
A rise in the price level that reduces the real wealth of people who hold financial assets is an illustration of the:
a. interest rate effect. b. monetary theory. c. supply-side theory. d. wealth effect. e. trade effect
Which of the following is associated with a more elastic demand curve?
a. availability of many close substitutes b. a greater amount of time for consumers to respond to a price change c. a large percentage of income spent on the good in question d. all of the above