Suppose there was an unexpected increase in aggregate demand. We would expect to observe
A) frictional unemployment to increase.
B) the duration of unemployment and the amount of unemployment to decrease.
C) higher wages, with the duration of unemployment and the amount of unemployment unchanged.
D) a decrease in aggregate demand.
B
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During the 1990s positive technological change in the production of chicken caused the price of chicken to fall. Holding everything else constant, how would this affect the market for pork (a substitute for chicken)?
A) The demand for pork would decrease and the equilibrium price of pork would decrease. B) The demand for pork would decrease and the equilibrium price of pork would increase. C) The demand for pork would increase because consumers could afford to buy more chicken and pork. D) The supply of pork would increase and the equilibrium price of pork would decrease.
When a corporation needs capital to expand, its choices are
A. to sell stocks on a stock exchange. B. to sell bonds. C. to reinvest its own earnings. D. All of these responses are correct.
Monopolistic competition is a market structure characterized by many small firms selling a homogeneous product.
Answer the following statement true (T) or false (F)
Peak load pricing
A. is designed to move consumers up along their demand curve. B. is usually used when supply is very elastic. C. is designed to encourage more supply rather than to allocate a fixed supply. D. is designed to shift the demand curve of consumers to the left.