The effect throughout the entire economy of one individual's increase in spending will be
a. less than the individual's spending.
b. equal to the individual's spending.
c. greater than the individual's spending.
d. offset by another individual's saving.
c
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Differentiate between the coordination problem and the incentive problem
What will be an ideal response?
Suppose that a regulated industry experiences an increase in the price of inputs used to produce the good. Which of the following statements is TRUE?
A) Under both the capture theory and the share-the-gains, share-the-pain theory profits will decrease. B) An increase in price will occur quicker in the share-the gains, share-the-pain theory than the capture theory. C) An increase in price will occur quicker in the capture theory than the share-the-gains, share-the-pain theory. D) In the capture theory there will be an increase in price but not in the share-the-gains, share-the-pain theory.
Which of the following would not affect an individual's demand?
A. Prices of related goods B. The individual's preferences C. The individual's income D. The costs of inputs
When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease. B. prices, causing them to definitely rise. C. output, causing it to definitely increase. D. prices, causing them to definitely fall.