The demand for microwaves in a certain country is given by: D = 8,000 - 30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. If this economy opens to trade while the world price of a microwave is $50, the domestic quantity demanded will be ________ and quantity supplied will be ________.
A. 5,000; 5,000
B. 6,000; 4,000
C. 6,500; 4,500
D. 6,500; 3,000
Answer: C
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Because investment, consumption expenditure, and net exports are interest-sensitive components of expenditure, a ________ in the federal funds rate brings ________ in ________
A) fall; a decrease; aggregate supply B) rise; an increase; aggregate supply C) fall; an increase; aggregate demand D) rise; an increase; aggregate demand E) fall; a decrease; aggregate demand
Assume that the MPC is .75, and investment spending rises by $25 billion. How much will real GDP change?
a. $25 billion b. $75 billion c. $100 billion d. $175 billion
In perfectly elastic supply, the more elastic the supply is, the . . .
What will be an ideal response?
A picture frame company operates in a monopolistically competitive market. Its short-run equilibrium price is $80 and its ATC is $65. It sells 100 picture frames a week. From this we can tell:
A. this firm is making a normal profit. B. other picture frame companies will want to exit the market. C. there are no other picture frame companies in the area. D. economic profits are $1,500.