The distinguishing feature that determines whether an analysis is classical or Keynesian is
A) the speed of price adjustment.
B) the slope of the aggregate demand curve.
C) the degree of monopoly power in the economy.
D) the assumption about the transmission mechanism of monetary policy.
A
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Kristen has an income of $450 per year to spend on music CDs and movies on DVDs. The price of a CD is $15 and the price of a DVD is $22.50. The indifference curves in the figure above (I1, I2, and I3 ) reflect Kristen's preferences
What is Kristen's best affordable combination of DVDs and CDs? A) 10 DVDs and 15 CDs per year B) 15 DVDs and 12 CDs per year C) 12.5 DVDs and 12 CDs per year D) 5 DVDs and 18 CDs per year
Using average cost pricing to regulate a natural monopoly creates a deadweight loss
Indicate whether the statement is true or false
Use the following general linear supply function:Qs = 40 + 6P - 8PI + 10F where Qs is the quantity supplied of the good, P is the price of the good, PI is the price of an input, and F is the number of firms producing the good. Suppose PI = $40, F = 50, and the demand function is Qd = 700 - 6P , then if government sets a price of $50 what will be the result?
A. a shortage of 160 B. a surplus of 120 C. a surplus of 160 D. a shortage of 120
The price elasticity of demand measures the responsiveness of the quantity:
a. demanded to changes in product quality. b. demanded to changes in income. c. demanded to changes in price. d. of supply to changes in demandf