Suppose that a local supermarket sells apples and oranges for 50 cents apiece, and at
these prices is able to sell 100 apples and 200 oranges per week. One week, the
supermarket lowered the price per apple to 40 cents and sold 120 apples. The next
week, they lowered the price per orange to 40 cents (after raising the price per apple
back to 50 cents) and sold 240 oranges. These results imply that the
In the classical model, the demand for loanable funds comes from
a. consumption expenditures and the government deficit, if any
b. net taxes and government expenditures
c. government purchases
d. investment spending and the government deficit, if any
e. consumption expenditures, investment spending and government purchases
Which of the following would happen as the wage rate gradually adjusts following a
shock?
a. Nothing will change
b. A shift of the production possibilities frontier
c. A shift in the short-run aggregate supply curve
d. A shift in the aggregate demand curve
e. A shift in the long-run aggregate supply curve
In monopolistic competition, nonprice competition
Jordan and Jennifer are musicians in New Orleans. Ezra is a musician thinking about
moving to New Orleans. Which of the following statements is correct?
Average Fixed Cost is the
The sharp rise in the debt-to-GDP ratio in 2008-2009
a. was exclusively automatic due to the effect of declining income on government
outlays and tax revenues.
b. was exclusively due to an aggressive fiscal policy.
c. was exclusively due to military expenditures.
d. was partly automatic due to the effect of declining income on government outlays
and tax revenues, and partly due to an aggressive fiscal policy.
e. was exclusively due to foreign aid expenditures.
If the rate of economic growth is positive, then everyone becomes better off.
The supply of labor
a. varies inversely with the price level
b. does not vary with the real wage rate
c. does not vary with the price level
d. varies directly with the price level
e. varies inversely with the nominal wage rate
Along its long-run total cost curve, a firm is producing
In general, a society will benefit more, the more self-sufficient it is.
A pure private good is one
Society’s core economic problem is
All of the following are characteristics of a perfectly competitive market, except one.
Which is the exception?
For each watch Switzerland produces, it gives up the opportunity to produce 50 pounds
of cheese. Germany can produce one watch at a cost of 100 pounds of cheese. Which of
the following is true?
a. The opportunity cost of producing watches is lower in Switzerland.
b. The opportunity cost of producing cheese is lower in Switzerland.
c. The opportunity cost of producing watches is the same in both countries.
d. It is impossible to compare costs because the two countries are not the same size.
e. In Germany, the cost of a pound of cheese is one watch.
Which of the following would lead to a rightward movement along a stationary money
demand curve?
a. A decrease in the interest rate
b. A decrease in the price level
c. An increase in the interest rate
d. An increase in the price level
e. An increase in real income