The Keynesian short-run aggregate supply curve in the simplified Keynesian model is unrealistic because
A) a vertical curve does not make economic sense.
B) prices and wages will never decrease.
C) the classical model is better in explaining how the economy operates.
D) some price adjustments do take place in the short run.
Ques. 2In the above figure, the profit-maximizing output and price for this monopolistically competitive firm are
A) 10,000 units at a price of 10 per unit.
B) 10,000 units at a price of 5 per unit.
C) 13,000 units at a price of 7 per unit.
D) 12,000 units at a price of 8 per unit.
Ques. 3By definition, a government-sponsored good
A) is a good that is deemed socially desirable.
B) is a good that should be available only to upper-income groups.
C) is always provided at a zero price.
D) does not affect society's general welfare.
Ques. 4Oligopoly is the only market structure in which rivalry among firms takes place. Do you agree or disagree? Why?
What will be an ideal response?
Ques. 5Which of the following will cause an outward (rightward) shift in the supply curve?
A) a reduction in the price of the good
B) an increase in the price of labor input
C) an increase in the number of consumers
D) technological progress
Ques. 6Inflation is best defined as
A) a sustained increase in the price of ALL goods and services in an economy.
B) a relative price increase.
C) a sustained increase in the average of all prices of goods and services in an economy.
D) a sustained increase in the price of a single good or service.
Ques. 7Economic growth is shown by
A) a point near the top of the production possibilities curve.
B) a point outside the production possibilities curve.
C) an inward shift of the production possibilities curve.
D) an outward shift of the production possibilities curve.
Ques. 8Who bears the costs of a program to control rents at a maximum level?
A) landlords or owners of housing units
B) consumers who face difficulty moving to a more suitable apartment
C) homeless who cannot find rental units
D) all of these
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