Refer to the figure below. 
If Row Resorts offers reduced rates, then Column Cruises would receive the highest payoff if it:
A. kept its rates high.
B. offered reduced its rates.
C. chose either strategy because it will have the same payoff in either case.
D. entered into a cartel with Row Resorts and agreed to jointly reduce rates.
Answer: B
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A) long-run aggregate demand B) short-run aggregate demand C) long-run aggregate supply D) short-run aggregate supply
Suppose the government spending multiplier is 2. The federal government cuts spending by $40 billion. What is the change in GDP if the price level is not held constant?
A) a decrease of more than $80 billion B) an increase of less than $80 billion C) an increase equal to $80 billion D) an increase of greater than $80 billion E) a decrease of less than $80 billion
Distinguish between a change in quantity supplied and a change in supply
What will be an ideal response?
Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Canada has the ________ opportunity cost of a pair of shoes than the United States, so: ________.
A. higher; Canada should specialize in apple production B. higher; Canada should specialize in shoe production C. lower; Canada should specialize in apple production D. lower; Canada should specialize in shoe production