PRICE LEVEL R LRAS O O Q AD: QUANTITY OF OUTPUT P in the short run and the long run. R in the short run and the long run. P in the short run and O in the long run. R in the short run and Q in the long run. SRAS, SRAS. AD, Refer to Figure 33-269. A decrease in taxes would move the economy from Q to
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- The income effect is a.the change in demand due to changes in real income due to a price change of the goodb.the change in demand of both goods due to changes in real income due to a price change of the goodc.the change in income due to changes in the demand for the goodd.observable but only after all the purchases have been made.Explain why a reduction in government spending, G will cause a reduction in price, P in the medium runQUESTION 27 When withdrawals are greater than injections, then O a. injections will rise and withdrawals will fall. O b. national income will fall. O c. injections will rise to equate withdrawals and national income will increase. O d. injections will fall and national income will fall.
- Refer to the Figure. When the economy moves from Point A to Point B. there has been $4 0 C E A B 52 an increase in demand. an increase in demand and a increase in supply. S₁ Dz an decrease in quantity demanded and a increase in quantity supplied. a decrease in demand.When due to rise in price of a good, total expenditure on the good also rises, then demand is _________Question 23 Which of the statements below is true? ORAfim eaming zero economic profits is not earning its opportunity cost OA The value of service provided by the miltary is included in GDP at market value Oc hcome resulting from unemployment benefts is included in GDP O& Other things equal in a market in equilbrum, any change in a determinant of demand will change the equilibrium quantity supplied
- Suppose that a drug that was illegal has been made legal. It is observed that the total expenditure on this drug falls with legalisation. While non-economists might explain this in terms of a change inconsumer tastes, as economists we can explain this while sticking with the assumption that consumer tastes have not changed. Draw a demand and supply diagram showing the case where total expenditureclearly and unambiguously falls (with no shift in the demand curve) and provide a written explanation. ( maximum word limit: 100 words)Price AS Level 100 105 103 AD Real GDP 10t 20t 30t Considering the figure above, at what point does the equilibrium occur? Select one: a. The equilibrium point occurs at a price level of 105 and an output level of 20t. b. The equilibrium point occurs at a price level of 20t and an output level of 105. c. The equilibrium point occurs at a price level of 103 and an output level of 30t. d. The equilibrium point occurs at a price level of 30t and an output level of 105.If the price of a good rises, then the effect on the income of the factors that are used intensively in itsproduction will beA) to raise income by an absolute amount that is less than the rise in prices.B) to raise income by an absolute amount that is more than the rise in prices.C) to raise income by a smaller percentage than the rise in prices.D) to raise income by a greater percentage than the rise in prices.
- Does an in income always shift income demand carves (for goods) to the right? why or why not?Agricultural price supports result in governments holding large inventories of agricultural products. Why do you think the government cannot simply give the products away to poor people?2. Rahim runs a fruit stand where he sells apples and mangoes. Each applecosts BDT 5.00 per piece and each mango costs BDT 8.00. The demand forapples and bananas are described by the following functions, where P a , andP m denotes the price of apples and bananas.Q m = 300-5P a + 3P mQ a = 3P a – 2.5P mWhat prices of mangos and apples Rahim should set in order to maximize profit?