Figure 1-2
Identify the slope of the two curves A and B in Figure 1-2.
A. A—zero, B—one.
B. A—one, B—zero.
C. A—one, B—different at different points.
D. A—different at different points, B—zero.
Answer: C
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Selling costs, such as advertising, are likely to be a large share of total cost in an industry that is
A) perfectly competitive. B) monopolistically competitive. C) a monopoly. D) non-profit.
Refer to the graph shown. Assume that the market is initially in equilibrium at a price of $6 and a quantity of 40 units. If the government imposes a $2 per-unit tax on this product, consumer surplus will fall from:
A. 80 to 45. B. 160 to 80. C. 90 to 45. D. 160 to 90.
Which of the following properly describes the interest-rate effect that helps explain the slope of the aggregate-demand curve?
a. As the money supply increases, the interest rate falls, so spending rises. b. As the money supply increases, the interest rate rises, so spending falls. c. As the price level increases, the interest rate falls, so spending rises. d. As the price level increases, the interest rate rises, so spending falls.
Holding other factors constant, if employers automatically enroll employees in retirement savings programs in order to overcome psychological barriers to saving, then the real interest rate will ________ and the equilibrium quantity of saving and investment will ________.
A. increase; decrease B. decrease; increase C. increase; increase D. increase; not change