What impact did the change in housing prices during 2002 to 2005 have within the framework of the AD/AS model?
a. Declining housing prices reduced aggregate demand shifting AD leftward.
b. Rising housing prices increased aggregate demand shifting AD rightward.
c. Rising housing prices led to increased construction shifting LRAS leftward.
d. Declining housing prices caused SRAS to shift leftward.
B
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Which of the following are complementary resources?
a. margarine and butter used in baking b. sugar and honey used in cereals c. a teacher and a chalkboard d. rye and wheat bread used in a sandwich shop e. a typewriter and a personal computer used in an office
In a market economy, the decisions about what to produce and how much of each good or service to produce are made by
a. government officials. b. economic planners. c. central bankers. d. consumers and producers.
When LCD televisions first came on the market, they sold for at least $1,000, and some for much more. Now many units can be purchased for under $400. These facts imply that:
A. the LCD television industry was once competitive but is now monopolistic. B. fewer firms produce LCD televisions than was the case five or ten years ago. C. the demand curve for LCD televisions has shifted leftward. D. the LCD television industry is a decreasing-cost industry.
Why is the price of a scarce exhaustible resource in a competitive market above the marginal cost of providing a unit of the resource?
What will be an ideal response?