Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y1.
C. P3 and Y1.
D. P3 and Y2.
Answer: D
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In Figure 5-1 from the text, if the price of pizzas is $8: a. how many pizzas will the consumer purchase? b. what is the payment for the optimal number of pizzas? c. how much consumer’s surplus will the consumer receive?
What will be an ideal response?
If an individual moves money from a money market deposit account to currency
A) M1 increases and M2 stays the same. B) M1 stays the same and M2 increases. C) M1 stays the same and M2 stays the same. D) M1 increases and M2 decreases.
The law of diminishing marginal productivity implies that opportunity cost:
A. is constant as all inputs are increased to produce successive units of output. B. increases as all inputs are increased to produce successive units of output. C. increases as one input is increased to produce successive units of output. D. is constant as one input is increased to produce successive units of output.
Perfect competition is characterized by many firms and no barriers to entry.
Answer the following statement true (T) or false (F)