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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Improvement in technology in the entire industry or an increase in the education of employees creates a(n):
a. increasing cost industry. b. a downward sloping LRS. c. constant cost industry. d. decreasing cost industry.
Which of the following is not an example of government's role as a referee?
A. Laws prohibiting businesses from meeting to fix prices B. Regulations governing safety in the workplace, wages, overtime, and hours of work C. Equal opportunity and labor laws that restrict businesses' freedom to hire and fire whomever they want D. Laws that require states and the federal government to balance their budgets
The quantity of raspberries sold at a local store increases from 100 pints to 1,500 pints when the price is reduced from $4.00 to $1.00. In this situation, the absolute price elasticity of demand for raspberries is approximately
A) 0.69. B) 6.7. C) 1.46. D) 4.3.
Nominal monthly wages increase from $1,500 to $1,800 while the price level increases by 4 percent. The percentage change in real monthly wages is about:
A. 10 percent B. 12 percent C. 14 percent D. 16 percent