Use the following diagrams to answer the next question.
Assume the economy is on aggregate demand AD4. The Fed should attempt to raise investment by enough to shift aggregate demand from AD4 to ________.
A. AD3 and then to AD2
B. AD3 and then to AD1
C. AD2 and then to AD3
D. AD1 and then to AD2
Answer: A
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Speculators believing cocoa prices are going to be higher next year will
A) buy cocoa futures, cause the expected future price of cocoa to fall, and induce some additional cocoa to be stored for future consumption. B) buy cocoa futures, cause the expected future price of cocoa to rise, and induce some additional cocoa to be stored for future consumption. C) sell cocoa futures, cause the expected future price of cocoa to fall, and induce some additional cocoa to be stored for future consumption. D) sell cocoa futures, cause the expected future price of cocoa to rise, and induce some additional cocoa to be stored for future consumption. E) sell cocoa futures, cause the expected future price of cocoa to fall, and induce greater current consumption of cocoa.
Suppose the government has declared beer to be an illegal substance and has imposed penalties on any person caught selling a beer. Buying a beer, however, remains legal
Using the above figure, in which CBL is the cost of breaking the law, beer consumption is decreased by A) 200 quarts. B) 300 quarts. C) 400 quarts. D) 500 quarts.
Suppose a concert by Lady Gaga and a basketball game played by the L.A. Lakers are substitutes, then which of the following is TRUE?
A) If the price of a ticket to a Lakers game increases, then the demand for Lady Gaga tickets will fall. B) If the price of a ticket to a Lakers game decreases, the quantity of Lakers tickets demanded will increase. C) If the price of a ticket to a Lakers game increases, then the demand for Lady Gaga tickets will remain unchanged. D) The price of a ticket to a Lakers game will always equal the price of a ticket to a Lady Gaga concert.
In 2011, Netflix raised prices on its DVDs and internet streaming plan. The Reed Hastings, CEO of Netflix, believes
a. Netflix is an industry leader thereby making the demand curve inelastic b. Netflix is an industry leader thereby making the demand curve elastic c. People are willing to pay more for the good d. There are many substitutes to Netflix's products