Suppose the demand for rental apartments decreased substantially. We would expect to observe
A) no change in rent and a sharp reduction in quantity supplied in the short run, and an even larger decrease in quantity supplied in the long run.
B) a large decrease in quantity supplied in the short run, followed by a counter-reaction and an increase in quantity supplied in the long run.
C) a small decrease in quantity supplied and significantly lower rents in the short run, and quantity supplied to decrease much more in the long run.
D) a large decrease in quantity supplied in the short run and the long run, but much larger reductions in rent in the long run.
Answer: C
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The economic policy response to the 2001 recession consisted of
A) a rapid change in fiscal policy and monetary policy. B) a sluggish change in fiscal policy and monetary policy. C) a rapid change in fiscal policy and a sluggish change in monetary policy. D) a sluggish change in fiscal policy and a rapid change in monetary policy.
Classical economic theory predicted that in the long run the economy would experience:
a. below full unemployment. b. rising rate of inflation. c. full employment. d. idle factors of production.
When institutions and policies provide secure property rights, a fair and balanced judicial system, monetary stability, and effective limits on the power of government, which of the following is most likely to be encouraged?
a. rent-seeking b. actions that reduce the value of resources c. productive activities d. destructive activities
Exhibit 10-4 Supply and demand curves for food servers
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In Exhibit 10-4, the equilibrium wage and the number of food servers employed per day, respectively, are:
A. $2.00 and 5,000. B. $4.00 and 10,000. C. $6.00 and 15,000 D. $8.00 and 20,000.