In the short run, an increase in real GDP will
a. increase unit costs and increase the price level
b. increase unit costs and decrease the price level
c. decrease unit costs and decrease the price level
d. decrease unit costs and increase the price level
e. have no effect on unit costs or the price level
A
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An individual derives utility from consuming "all other goods," g, and clean air (measured by the reduction in particulate matter per m3), a, as measured by the utility function U(g,a) = g0.6a0.4
The price of consumer goods equals $20 and the price of clean air (abatement) equals $10. What is the slope of the Engel curve when income increases from $100 to $200? A) The slope is 25. B) The slope is -25. C) The slope is zero. D) The slope is infinite.
Describe the market process that should occur if the price of a product is below its equilibrium price; now describe what would occur if the price is above its equilibrium price, assuming no market interference
What will be an ideal response?