Refer to the information provided in Figure 9.2 below to answer the question(s) that follow.
Figure 9.2Refer to Figure 9.2. Suppose demand for wheat is initially D2. If consumer incomes increase, then demand for wheat will shift to ________. This will ________ the equilibrium price of wheat, and individual profit-maximizing firms will produce ________ bushels of wheat.
A. D3; increase; 15
B. D1; decrease; 0
C. D1; increase; 10
D. D3; decrease; 7
Answer: A
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Protectionism
A) is the use of cheap labor to protect firms from paying high wages. B) refers to the use of copyright and trademark laws to protect inventors and artists from losing the rights to their creative efforts. C) is the use of trade barriers to protect domestic firms from foreign competition. D) refers to reductions in tariffs and other barriers that protect consumers from paying high prices.
If the marginal propensity to save (MPS) is 0.5 and net exports falls by $100 million, then
A) real Gross Domestic Product (GDP) will increase by $100 million. B) real Gross Domestic Product (GDP) will fall by $200 million. C) real Gross Domestic Product (GDP) will not change. D) the effect on real Gross Domestic Product (GDP) cannot be determined from the given information.
In a monopoly where the marginal revenue and price are, respectively, given by $10 and $20, the price elasticity of demand is:
A. ?1. B. ?0.5. C. ?2. D. Cannot be determined based on the information in the question.
The GDP deflator
A. Is the price index based on a fixed basket of goods and services for the government. B. Is the broadest price index, covering all output. C. Is the best measure of inflation for consumers. D. Reflects the price changes felt by producers but not consumers.