A decrease in consumption caused by a factor other than a change in the price level
A) shifts the AD curve to the right.
B) shifts the AD curve to the left.
C) causes an upward movement along the existing AD curve.
D) causes a downward movement along the existing AD curve.
E) none of the above.
B
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The opportunity cost of a purchase is:
a. the selling price of the good or service. b. zero if the good or service satisfies a need. c. greater for persons who are rich. d. the good or service given up for the good or service purchased.
Suppose a firm in a perfectly competitive market is operating at its profit-maximizing level of output. Will the firm suspend operations if it faces a reduction in the price it can charge for its product?
a. No, because it can always raise its prices in the short run. b. No, because it can always raise its prices in the long run. c. No, as long as the firm earns sufficient revenue to pay all of the variable costs. d. Yes, since it never makes sense to operate at a loss, even in the short run. e. No, because it always makes sense to operate at a loss, even in the long run.
The intersection of the aggregate demand and the aggregate supply curve defines the equilibrium level of _____ and the price level
a. real interest rate b. nominal interest rate c. nominal GDP d. real GDP e. unemployment
What are the two characteristics that are essential to economic analysis of invention?
A. Fixed costs and public goods B. Fixed costs and private goods C. Variable costs and public goods D. Variable costs and private goods