Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1.
B. P4 and Y2.
C. P5 and Y1.
D. P5 and Y2.
Answer: D
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If the price of margarine falls, the demand for butter will
A) remain unchanged. B) increase. C) decrease. D) rise at first and then fall.
Refer to the above table. Demand is least price elastic at a price of
A) $10.00. B) $7.50. C) $7.00. D) $5.00.
Political structure, or the process by which laws become enacted:
A. has no effect on policy created. B. is virtually the same everywhere. C. affects the outcome of policy. D. has one feature that is present in every government structure in existence.
In order to minimize the net cost of pollution reduction, the level of pollution reduction (the amount of a pollutant not released into the environment) should be the level at which
A. the total cost of reducing pollution is minimized and the total benefits of reducing pollution are maximized. B. the marginal benefit of reducing pollution equals the marginal cost of reducing pollution. C. the total benefit of reducing pollution equals the total cost of reducing pollution. D. the marginal benefit of reducing pollution exceeds the marginal cost of reducing pollution by the greatest possible amount.