In the short-run macro model, if firms produce more output than they sell, those firms will
a. increase the prices of their products
b. decrease their output
c. increase their output
d. cut back on their consumption spending
e. increase the prices of their products and reduce the amount of output they produce
B
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What happens to the quantity of cell phones supplied and the supply of cell phones if the price of a cell phone falls?
What will be an ideal response?
John derives more utility from having $1,000 than from having $100. From this, we can conclude that John
A) is risk averse. B) is risk loving. C) is risk neutral. D) has a positive marginal utility of wealth.
Suppose the supply of coal is perfectly inelastic, and the price elasticity of demand for coal is -0.4. If the government imposes a binding price ceiling for coal at a price that is 20 percent below the market equilibrium price, what is the impact of this policy on the market quantity?
A. Excess demand equals 16 percent of the market equilibrium quantity. B. Excess demand equals 80 percent of the market equilibrium quantity. C. The policy does not affect the market quantity. D. Excess demand equals 8 percent of the market equilibrium quantity.
The measure of the cost of a standard basket of goods and services in any period relative to the cost of the same basket of goods and services in the base year is called the:
A. consumer price index. B. consumption production index. C. consumer production index. D. consumption cost calculator.