Suppose there are five goods in the economy, A-E. The current-year quantity of each is 10A, 20B, 30C, 40D, and 50E. Current-year prices are $1 for each unit of A, $2 for each unit of B, $3 for each unit of C, $4 for each unit of D, and $5 for each unit of E. Base-year prices are $1 for each good. Real GDP in the current year equals _________ and GDP equals _________
A) $550; $150
B) $130; $530
C) $150; $550
D) $530; $130
E) none of the above
C
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When two goods are perfect substitutes, their indifference curves are straight lines
Indicate whether the statement is true or false
A price-discriminating monopolist will tend to charge a lower price to students if it believes that students: a. have a lower willingness to pay than other demanders. b. have a greater willingness to pay than other demanders. c. have very elastic demand curves
d. have nearly vertical demand curves.
An increase in the price of gasoline shifts the demand for tires to the
a. left, because gasoline and tires are substitutes. b. left, because gasoline and tires are normally used together. c. right, because gasoline and tires are substitutes. d. right, because gasoline and tires are normally used together.
Which of the following statements is true?
A) To a large degree, Keynesians focus on the spending components of total expenditures when they seek to understand what determines GDP; monetarists focus on the money supply and velocity when their objective is the same. B) To a large degree, monetarists focus on the spending components of total expenditures when they seek to understand what determines GDP; Keynesians focus on the money supply and velocity when their objective is the same. C) Both Keynesians and monetarists focus on the spending components of total expenditures when they seek to understand what determines GDP; neither group focuses on the money supply and velocity. D) Neither Keynesians nor monetarists focus on the spending components of total expenditures when they seek to understand what determines GDP; both focus on the money supply and velocity.