Refer to the total revenue graph below. When the seller is earning maximum revenues from selling Product X, the demand is:
A. Elastic
B. Inelastic
C. Unit-elastic
D. Perfectly inelastic
C. Unit-elastic
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Assume that the union wage already exceeds the market-clearing wage. If the union wage is increased, holding other factors constant, then the number unemployed ________ and the number employed ________.
A. increases; decreases B. increases; does not change C. decreases; increases D. increases; increases
Suppose there are constant returns to scale. Now suppose that over time a country doubles its workers, its natural resources, its physical capital, and its human capital, but its technology is unchanged. Which of the following would double?
a. both output and productivity b. output, but not productivity c. productivity, but not output d. neither productivity nor output
Proponents of the real business cycle model argue that the short-run aggregate supply curve is
A) flat. B) positively sloped. C) vertical. D) negatively sloped.