When resource prices are negotiable, the long-run aggregate supply curve is represented by:
a. an upward-sloping line
b. a downward-sloping line
c. a vertical line at potential output
d. a horizontal line at the actual price level.
e. a horizontal line at the expected price level.
c
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A political candidate promises voters more funding for AIDS research and child care and assures them they will not have to sacrifice any other goods or services to obtain the additional programs.
A. This may be possible if the economy has unemployed resources. B. This is possible only in a fully employed economy. C. This is possible if the economy is producing on its production possibilities curve. D. None of the choices are possible.
Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice. 
Suppose a timing element is added to the game, and that Jordan buys a ticket first. Then, after seeing Jordan's choice, Lee buys a ticket. What will be the equilibrium outcome?
A. Jordan will buy a ticket to the documentary and Lee will buy a ticket to the comedy. B. Both Jordan and Lee will buy a ticket to the comedy. C. Jordan will buy a ticket to the comedy and Lee will buy a ticket to the documentary. D. Both Jordan and Lee will buy a ticket to the documentary.
For a normal good, the income elasticity of demand is:
A) positive or negative depending on the share of income accounted for by the good. B) always equal to 1. C) positive if income increases and negative when income declines. D) always positive.
Who would be more likely to study the effects of government spending on the unemployment rate, a macroeconomist or a microeconomist?