If wages are sticky, then a smaller than expected increase in the price level
a) reduces the real costs of production, so the aggregate quantity of goods and services rises.
b) raises the real costs of production, so the short-run aggregate supply curve shifts left.
c) reduces the real costs of production, so the short-run aggregate supply curve shifts right.
d) raises the real costs of production, so the aggregate quantity of goods and services declines.
Ans: d) raises the real costs of production, so the aggregate quantity of goods and services declines.
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COLA stands for:
A. cost-of-living adjustment. B. cost-of-living aggregate. C. capital operations leasing adjustment. D. capital operations leasing agreement.
The marginal cost of providing another viewer with access to HBO is zero. Since only people who pay for HBO can watch it:
A. HBO will not be profitable in the long run. B. more than the socially optimal number of people will have access HBO. C. access to HBO is nonexcludable. D. fewer than the socially optimal number of people will have access to HBO.
The amount of after-tax income received by households is measured by:
A. discretionary income. B. national income. C. disposable income. D. personal income.
Refer to Scenario 9.5 below to answer the question(s) that follow. SCENARIO 9.5: Investors put up $520,000 to construct a building and purchase all equipment for a new restaurant. The investors expect to earn a minimum return of 10 percent on their investment. The restaurant is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $1,000 per week in other fixed costs. Variable costs include $1,000 in weekly wages and $600 per week for materials, electricity, etc. The restaurant charges $3 on average per meal. Refer to Scenario 9.5. In the short run, if the restaurant shuts down, it ________ variable costs and ________ revenue.
A. has; earns no B. has; earns C. has no; earns no D. has no; earns