Suppose a shortage for good X exists. Given this information, we know that
A) the price of good X will tend to rise toward the equilibrium level.
B) the price of good X will tend to fall toward the equilibrium level.
C) a government price floor should be imposed above the current price so that the market can work more effectively.
D) a government price ceiling should be imposed above the current price so that the market can work more effectively.
A
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The U.S. economy is experiencing falling output, falling employment, falling incomes and rising unemployment. These conditions best describe a business cycle ________
A) peak B) expansion C) recession D) trend E) trough
Why might economic policies aimed at stabilization actually increase the magnitudes of economic fluctuations?
What will be an ideal response?
Consider the following simplified sequence of exchanges. A farmer sells wheat to a miller, for 25 cents. The miller grinds the wheat into flour, and sells that to a baker, for 35 cents
The baker turns the flour into a loaf of bread, which she sells to a grocer for 60 cents. The grocer then sells you the loaf of bread for 85 cents. What can we conclude? A) Your purchase of the bread avoided the use of a middleman. B) The grocer's profit means you lost on the deal. C) GDP increases by 25 cents. D) GDP increases by 85 cents. E) GDP increases by $2.05.
The “law” of diminishing returns rests on the “law” of variable input proportions.
Answer the following statement true (T) or false (F)