Upon getting a big promotion, Sally decides to buy a house in the neighborhood she grew up in as a child. In fact, the house she buys used to belong to a neighbor of hers, and so she's certain it's in good shape and well worth the $200,000 she pays for it. The only thing Sally needs to do is replace all the gutters for $1,000, which she happily does. How will GDP be affected by Sally's recent purchases?
A. Consumption will increase by $1,000, and investment will increase by $200,000.
B. Consumption will increase by $210,000.
C. Investment will increase by $201,000.
D. GDP will increase by $1000.
D. GDP will increase by $1000.
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Jimmy’s java shop operates in a monopolistically competitive market. Jimmy’s current output is where average costs are minimized. If this is the case, we would expect Jimmy to
A. increase output and lower price. B. decrease output and Jimmy’s average costs would increase. C. continue production at the current level as Jimmy’s is operating at his best outcome. D. increase output and Jimmy’s average costs would decrease.
When we move along a given supply curve,
a. only price is held constant. b. technology and price are held constant. c. all nonprice determinants of supply are held constant. d. all determinants of quantity supplied are held constant.
If Billie buys a smoothie at the corner cafe, which of the following best relates this transaction to the circular flow diagram?
a. Goods flow from the product market, and money flows from households. b. Resources (land, labor, capital) flow from households, and money flows from businesses. c. Income flows from the factor market, and goods flow into the factor market. d. Resources flow into households, and back into the goods and services market.
Which of the following is a result of unemployment that is very low?
a. the few people who are unemployed stop looking for jobs b. wages drop below the level of minimum wage c. companies have difficulties recruiting workers d. companies stop looking for people to fill unfilled jobs