The following diagram depicts the market for physicians' services that is originally in equilibrium at the point where demand and supply (D0 and S0) intersect. As physician supply increases from S0 to S1, an even larger concurrent shift in demand from D0 to D1:
a. will result in a new equilibrium at P2 and Q2.
b. will cause overall spending on physicians' services to increase.
c. will force physicians to limit the number of patients they see.
d. will increase demand for physicians' services, but not spending.
e. will result in a decrease in the price of physicians' services.
b. will cause overall spending on physicians' services to increase.
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If the government decreases its purchases of goods and services by $12,000 and the MPS is 0.5, GDP and income will eventually decrease by
A) $2,400. B) $6,000. C) $24,000. D) $60,000.
During its run on Broadway, the play The Producers regularly sold out all available tickets at the St. James Theater. The theater could have raised ticket prices from $75 to $125 and still sold all available tickets but chose not to do so
The best explanation for this decision is A) theater owners do not want to raise their prices on weekends, when demand is high, and then have to lower prices during the week, when demand is lower. B) firms sometimes give up profits in the short run to keep their customers happy and increase their profits in the long run. C) theater owners are unaware of the elasticity of demand for Broadway shows. D) theater owners are not motivated to maximize their profits.
A look at macroeconomic data across countries reveals that when economies experience recessions, unemployment rates rise, but wages fall very little, if at all. Which of the following is most likely to support this observation?
a. Wages are determined by the interaction of the forces of labor demand and supply. b. The demand for labor is derived demand and hence does not fall during recessions. c. The labor market usually exhibits perfect competition. d. The labor supply curve becomes perfectly inelastic during recessions. e. Long term labor contracts make the wage rates sticky downwards.
Is it possible for a currency to appreciate relative to another currency, and depreciate relative to a third? a. No, this is not theoretically possible; a currency rises or falls against all others. b. No, although this could occur under a strict gold standard
c. Yes, this is possible in a world of floating exchange rates. d. Yes, in theory, but it does not happen in reality.