If the demand elasticity for corn in the current marketing is -0.5 and you know that the demand curve is linear and it goes through 10 billion bushels at a price of $5.00 per bushel, then if production turns out to be 12 billion bushels, the price of corn will be
A. $3.00
B. $4.00
C. $5.00
D. $6.00
Ans: A. $3.00
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Workers and firms both expect that prices will be 2.5% higher next year than they are this year. As a result
A) workers will be willing to take lower wages next year, but not lower than a 2.5 percent decrease. B) aggregate demand will increase by 2.5%. C) the purchasing power of wages will rise if wages increase by 2.5%. D) the short-run aggregate supply curve will shift to the left as wages increase.
According to economist A. P. Lerner, taking income from a wealthy individual and giving it to a poorer individual would
a. decrease the economy's total utility b. decrease the economy's investment rate c. eventually increase poverty in the economy d. lessen the incentive to work e. increase the economy's total utility
John Maynard Keynes argued that
A. downward nominal-wage rigidity prevented the classical self-correction mechanism from working to end recessions. B. the automatic forces of the market would restore the economy to full employment very quickly. C. the classical macroeconomists' argument that government spending should be used in recessions would not eliminate a recession. D. fluctuations in aggregate supply were the primary causes of recessions.
Above the shutdown point, a competitive firm's supply curve coincides with its:
A. marginal revenue curve. B. ?marginal cost curve. C. ?average variable cost curve. D. ?average total cost curve.