The usual results of an adverse supply shock are
A. a rise in prices and a fall in output.
B. a fall in prices and a rise in output.
C. increased growth and lower inflation.
D. higher net exports.
Answer: A
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Satellite TV is a close substitute for cable TV. In the 1990s, small satellite TV units were developed that made it less costly for individual consumers to subscribe to satellite TV service. This caused the price elasticity of demand for cable TV service to:
A. shift to the left. B. become more inelastic. C. become more elastic. D. become less elastic.
When wages increase, the income effect a. increases the quantity of labor supplied b. increases the supply of labor
c. decreases the quantity of labor supplied d. decreases the supply of labor.
An efficient distribution of goods requires that
a. everyone gets an equal share of each good. b. marginal cost equal marginal utility for the last unit produced. c. each person derives the same total utility from the good. d. since tastes differ, every person pays a different price in accordance with different marginal utilities.
Assuming the total population is 100 million, the civilian labor force is 50 million, and 47 million workers are employed, the unemployment rate is:
A. 3 percent. B. 6 percent. C. 7 percent. D. 53 percent.