Professor Plum, who earns $100,000 per year, read in the paper today that the university pays its basketball coach one million dollars per year in exchange for his agreement to remain at the university for at least three more years. The coach earns more than Professor Plum because:
A. universities value sports more than academics.
B. the coach has more human capital than does Professor Plum.
C. the coach is able to earn economic rent due to his unique talents.
D. the demand for sporting events exceeds the demand for college degrees.
Answer: C
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When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease. B. prices, causing them to definitely rise. C. output, causing it to definitely increase. D. prices, causing them to definitely fall.
The average total cost curve
a. is downward sloping at all levels of output b. is downward sloping when marginal costs are decreasing and upward sloping when marginal costs are increasing c. is upward sloping when marginal costs are decreasing and downward sloping when marginal costs are increasing d. does not vary with output
The flat part of the aggregate supply curve is the _____ range.
Fill in the blank(s) with the appropriate word(s).
The notion that the value of money is determined by the overall quantity of money in existence is known as the:
A. money quantity theory. B. quantity theory of money. C. price level theory. D. level theory of prices.