Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1.
B. P2 and Y1.
C. P2 and Y3.
D. P1 and Y2.
Answer: B
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Suppose two neighborhoods (A and B) have identical housing, but neighborhood A has a strictly enforced deed restriction that prohibits homeowners from parking junk cars in the front yard
If houses in neighborhood A sell for $105,000 and houses in neighborhood B sell for $100,000, how would an economist value the external cost of visible junk cars, per house? A) $205,000 B) $105,000 C) $100,000 D) $5,000 E) None of the above answers is correct.
Which of the following correctly identifies an argument against free trade?
A) Free trade reduces world production. B) Free trade hampers technology transfers. C) Free trade increases the wages in importing countries. D) Free trade may result in job loss in some specific industries in the domestic economy.
For an economy as a whole, income must equal expenditure because
a. the number of firms is equal to the number of households in an economy. b. individuals can only spend what they earn each period. c. every dollar of spending by some buyer is a dollar of income for some seller. d. every dollar of saving by some consumer is a dollar of spending by some other consumer.
Which of the following statements concerning a monopolistically competitive industry is correct?
A. If there are short-run losses, firms will leave the industry and the demand curves of the remaining firms will shift to the right. B. If there are short-run economic profits, firms will enter the industry and the demand curves of existing firms will shift to the right. C. If there are short-run losses, firms will leave the industry and the demand curves of the remaining firms will shift to the left. D. If there are short-run economic profits, firms will leave the industry and the demand curves of the remaining firms will shift to the right.