Figure 3.4 illustrates the demand for tacos. A successful advertising campaign to sell tacos would bring about a movement from:
A. point a to point b.
B. point c to point b.
C. D2 to D1.
D. D0 to D1.
Answer: D
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In the aggregate demand–aggregate supply model, which of these changes is most likely when the cost of production increases in the long run? a. A leftward shift of the short-run aggregate supply curve b. A leftward shift of the short-run aggregate demand curve c. A rightward shift of the short-run aggregate supply curve d. An increase in the potential output level increases
e. A decrease in the actual price level decreases.
A firm will generally believe that if it increases its spending on R&D its competitors will not follow, but if it decreases its spending they will follow
a. True b. False Indicate whether the statement is true or false
A monopsonistic employer:
A. has a perfectly elastic labor supply curve. B. is necessarily a monopolist in the product market. C. confronts a marginal resource (labor) cost that is greater than the wage rate. D. confronts a marginal resource (labor) cost that is less than the wage rate.
Suppose the economy is operating on the LM curve but not on the IS curve. Given this information, we know that
A) the goods market is in equilibrium and the money market is not in equilibrium. B) the money market and bond markets are in equilibrium and the goods market is not in equilibrium. C) the money market and goods market are in equilibrium and the bond market is not in equilibrium. D) the money, bond and goods markets are all in equilibrium. E) neither the money, bond, nor goods markets are in equilibrium.