A union model changes the market form from that of perfect competition to that of a
A. monopsony.
B. oligopoly.
C. monopoly.
D. monopolistic competition.
Answer: C
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According to the Application, economist John B. Taylor found that the aid to state and local governments which were a part of the 2009 stimulus package were used primarily to
A) increase spending on transfer programs, goods, and services. B) increase spending on goods and services. C) increase spending on transfer programs, but spending on goods and services declined. D) increase spending on infrastructure, but spending on transfer programs declined.
Ignoring any supply-side effects, to close an inflationary gap of $100 billion with a government expenditure multiplier of 5, the government could
A) decrease government expenditure on goods and services by $20 billion. B) decrease government expenditure on goods and services by $100 billion. C) lower taxes by $100 billion. D) increase government expenditure on goods and services by $20 billion. E) lower taxes by more than $20 billion.
The Wong family consumes 3 pounds of fish and 5 pounds of chicken per month. The price of fish is $8 per pound and chicken is $4 per pound
a. What is the amount of income allocated to fish and chicken consumption? b. What is the price ratio (the price of fish relative to the price of chicken)? c. Explain the meaning of the price ratio you computed. d. If the Wongs maximize utility, what must the ratio of the marginal utility of fish to the marginal utility of chicken be equal to? e. If the price of chicken rises, will the Wong family consume more chicken, less chicken, or the same amount of chicken? Explain your answer using the rule of equal marginal utility per dollar.
An adverse supply shock would shift: a. only the short-run aggregate supply curve outward
b. only the long-run aggregate supply curve outward. c. only the long-run aggregate supply curve inward. d. only the short-run aggregate supply curve inward. e. both the long-run and the short-run aggregate supply curves inward.