Which of the following would qualify as an aggregate supply shock?
A. An unexpected surge in consumer confidence
B. An unexpected decrease in oil prices
C. A seasonally expected decrease in oil prices
D. An anticipated tax cut
Answer: B
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If the price of gasoline rises sharply and the demand for sports utility vehicles falls, then the two goods are
A) complements. B) normal goods. C) substitutes. D) inferior goods.
Why is the marginal product of labor for Moe’s higher with two employees than it is with more workers?
a. Adding a second worker yields the biggest efficiency gain.
b. It is less expensive to pay only two workers than for three or more workers.
c. Variable costs are higher with fewer workers.
d. The second worker is the best employee.
Micro and macro failures of the marketplace never justify government intervention.
Answer the following statement true (T) or false (F)
In the Aggregate Demand - Aggregate Supply diagram in Figure 8.1, Box 4 should be filled with 
A. PI for Price Index. B. AD for Aggregate Demand. C. RGDP for Real Gross Domestic Product. D. AS for Aggregate Supply.