What will happen in an economy if the actual GDP is too high relative to the potential GDP?
What will be an ideal response?
If actual output is higher than potential output, the economy will experience lower-than-natural unemployment, resulting in increased upward pressure on prices and wages. This may cause inflation.
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If marginal cost exceeds average variable cost, then ________ cost is ________ as output increases
A) average total; at a maximum B) average total; falling C) average variable; rising D) average fixed; at a maximum
The burden of a tax per unit of output will fall heavily on consumers when demand is relatively ________ and supply is relatively ________
A) inelastic; elastic B) inelastic; inelastic C) elastic; elastic D) elastic; inelastic
Which of the following is a difference between a monopolist and a firm in perfect competition?
a. The marginal revenue curve is downward-sloping. b. Marginal revenue equals price. c. Economic profits are zero in the long-run. d. The marginal revenue curve lies above the demand curve.
Increasing GDP generally causes increases in problems of waste disposal
a. True b. False Indicate whether the statement is true or false