Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1.
B. P2 and Y1.
C. P2 and Y3.
D. P1 and Y2.
Answer: B
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Assume that you want to invest in Thailand and therefore need to exchange U.S. dollars for Thai baht. You are at the bank and see that, depending on whether you use the bid or the ask rate, you have to pay either $10,000,000 or $11,000,000 to get a certain amount of baht. Which amount is correct?
a. It is not possible to tell without knowing which amount was calculated with which exchange rate. b. It is not possible to tell without knowing the bid and ask rate as well as the desired amount in baht. c. It has to be $10,000,000. d. It has to be $11,000,000. e. It could be either $10,000,000 or $11,000,000
Suppose that firms are located in a circle on an island. You are given transportation costs, fixed costs, variable costs, and demand (assume that customers are spread evenly along the circle). In an example of restaurant location on an island, if the number of people on the island doubled, the number of restaurants
A. would halve.
B. would stay the same.
C. would double.
D. would increase by a factor of 
.
If a firm is an oligopolist, which is NOT true?
A) It must pay attention to other firms' prices. B) It is one of a relatively small number of firms dominating its industry. C) It can sell all the units it wants at the going market price. D) It is engaged in a strategic game.
In-kind transfers
A. Are a payment for work. B. Provide the direct transfer of goods and services. C. Increase the poverty index. D. Are one way to reduce the moral hazards of the welfare system.