Wheat is produced in a perfectly competitive market. Market demand for wheat increases. This will cause the individual wheat farmer's marginal revenue to __________ and their profit maximizing level of output to __________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
C) decrease; increase
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Which of the following is false?
A. The completion of the national railroad network by 1890 led to the development of a national American market rather than just a series of smaller regional markets. B. Before the Civil War the North and the South were in agreement on the issue of protective tariffs, but were in conflict over the spread of slavery into the new Western territories. C. The U.S. was the first mass-consumption society. D. From 1900 to the end of World War I, U.S. farmers prospered.
Explain the concept of purchasing power parity
What will be an ideal response?
Increases in aggregate demand
A. lead to increases in real interest and unemployment rates if there is considerable excess capacity in the economy. B. result only in inflation when the economy operates at its maximum productive capacity. C. may be caused by ever-greater downward pressures on prices and wages if reserve requirements are raised. D. may be caused by an increase in taxes. E. increase both inflation and the unemployment rates.
In terms of aggregate supply, a period in which nominal wages and other resource prices are unresponsive to price-level changes is called the:
A. long run. B. short run. C. immediate market period. D. very long run.