Suppose you observe a decrease in the equilibrium price and quantity of corn. Of the options listed below, this is best explained by:
A. an increase in the cost of growing corn.
B. a rise in consumer income assuming corn is a normal good.
C. a fall in consumer income assuming corn is a normal good.
D. a decrease in the cost of growing corn.
Answer: C
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Differentiate between the four market structures on the basis of the type of products sold
What will be an ideal response?
Refer to Figure 22-4. Suppose the per-worker production function in the figure above represents the production function for the U.S. economy
If the United States decided to cut its support of university research in half, this would cause a movement from A) B to D. B) B to E. C) B to C. D) B to A.
Consider two labor markets in which jobs are equally attractive in all respects other than the wage rate. All workers are equally able to do either job. Initially, both labor markets are perfectly competitive. If a union organizes workers in one of the markets, then the wage rates will tend to
a. rise in both markets. b. fall in both markets c. rise for the union jobs, but remain unchanged for the nonunion jobs. d. rise for the union jobs and fall for the nonunion jobs.
Suppose that real GDP is initially $100 trillion and the government attempts to increase real GDP to $101 trillion. The marginal propensity to consume is 0.75, and every $1.00 increase in real government spending crowds out $0.50 in real planned investment expenditures. How much increase in real government spending could lead to the desired level of real GDP?
A. $500 billion B. $0 C. $250 billion D. $100 trillion