Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1.
B. P2 and Y1.
C. P2 and Y3.
D. P1 and Y2.
Answer: B
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Refer to Table 19-1. Suppose that a simple economy produces only four goods and services: sweatshirts, dental examinations, coffee drinks, and coffee beans. Assume all of the coffee beans are used in the production of the coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals
A) 3,090 units. B) $7,250. C) $8,750. D) $9,750.
Public goods face the
A) principle of rival consumption. B) free-rider problem. C) law of overproduction. D) exclusion principle.
In 2001, Spain was ________ percent poorer than Germany.
A. 10 B. 20 C. 25 D. 15
A good salesperson can sell $100,000 worth of goods, while a poor one can sell only $10,000 worth of goods. Job applicants know if they are good or bad, but the firm does not. A firm will offer job applicants a choice between a fixed salary of $2,000 or a commission on the sale. Assume risk-neutral salespersons and no opportunistic behavior. Given that the firm wants to distinguish a prospective
good salesperson from a poor one, what should be the commission on sales? A) Commission should be larger than 50%. B) Commission should be larger than 40%. C) Commission should be between 2% and 20%. D) Commission should be smaller than 2%.