Why is the budget line downward sloping?
A. Income effect
B. Opportunity costs
C. Comparative advantage
D. Diminished marginal utility
Answer: B
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Suppose the government lowers unemployment by hiring more government workers. How does it matter whether wages and prices are sticky?
What will be an ideal response?
Negative externalities occur when one person's actions
a. cause another person to lose money in a stock market transaction. b. cause his or her employer to lose business. c. reveal his or her preference for foreign-produced goods. d. adversely affect the well-being of a bystander who is not a party to the action.
Medicare is an example of a third-party payment for medical services that
A) causes providers to supply less of medical services than they would without the payment. B) causes buyers to consume more of medical services than they would without the payment. C) does not cause any change in the equilibrium position for medical services which existed without the subsidy. D) causes the price of medical services to rise for the consumer once the payment is provided.
Explain the combined effects of these events on U.S. real GDP and the price level, starting from a position of long-run equilibrium
What will be an ideal response?