An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock.
B. negative supply side shock.
C. positive demand side shock.
D. positive supply side shock.
Answer: B
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How does slow price adjustment, as assumed in Keynesian models, result in real economic variables being affected by nominal variables?
What will be an ideal response?
In an open economy as the price level decreases, a(n) ____ in demand for domestic goods relative to foreign goods results in a(n) ____ in the quantity of RGDP demanded
a. increase, decrease b. increase, increase c. decrease, decrease d. decrease, increase
Suppose that production for good X is characterized by the following production function, Q = K0.5L0.5, where K is the fixed input in the short run. If the per-unit rental rate of capital, r, is $15 and the per-unit wage, w, is $25, then the average fixed cost of using 9 units of capital and 81 units of labor is:
A. $75. B. $80. C. $5. D. There is insufficient information to determine the average fixed costs.
Which of the following statements is true?
a.In perfect price discrimination, the firm is able to convert the entire area of consumer surplus that existed under perfect competition into producer surplus. b. There is no producer surplus associated with perfect price discrimination. c. There is a deadweight loss associated with perfect price discrimination. d. For a monopoly there is an increase in total welfare for society compared to perfect competition.