Use of bovine growth hormone (BGH) on cattle dramatically increases the milk output of dairy cows. Dairy farmers in Wisconsin vigorously oppose permitting the drug’s use over concerns of an excess supply and a consumer reaction on the purity of food issue that could put many of them out of business. Which of the graphs in Figure 4-13 is consistent with these concerns?
A. 1
B. 2
C. 3
D. 4
Answer: B
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If a 10 percent price increase generates a 20 percent decrease in quantity demanded, then demand is
A) elastic. B) perfectly inelastic. C) perfectly elastic. D) inelastic. E) unit elastic.
Unemployment that occurs from fundamental technological changes in the production, or from the substitution of new goods for customary ones, is known as:
A. cyclical unemployment. B. seasonal unemployment. C. frictional unemployment. D. structural unemployment.
Argentina's financial crisis was due to
A) poor supervision of the banking system. B) a lending boom prior to the crisis. C) fiscal imbalances. D) lack of expertise in screening and monitoring borrowers at banking institutions.
If the aggregate demand curve shifts to the left and the aggregate supply curve shifts to the right, the result will be a
a. decrease in the level of output. b. decrease in the price level. c. higher price level. d. higher unemployment rate.