One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired.
B. prices tend to adjust more quickly downward than upward.
C. wages are sticky downward.
D. input prices increase with output prices.
Answer: C
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Someone who values a lottery at more than the expected value is
a. a risk lover b. risk neutral c. risk averse d. one who tends to play lots of lotteries
In the case of a beneficial externality
a. marginal private cost is below marginal social cost. b. marginal social cost is above marginal private cost. c. marginal social cost and marginal private cost are equal. d. the free market price is below the socially efficient price.
When disposable income increases from $7 trillion to $7.5 trillion, consumption expenditure increases from $6.5 trillion to $6.9 trillion. The MPS equals
a) 0.75 b) 0.76 c) 0.8 d) 0.2
Refer to the graphs below for a competitive market in the short run. What will happen in the long run to industry supply and the equilibrium price P of the product?
A. S will decrease, P will decrease
B. S will increase, P will decrease
C. S will decrease, P will increase
D. S will increase, P will increase