The price level rises more rapidly as the maximum output level is approached along an aggregate supply curve because
A. profit-taking firms are exploiting their market size and power.
B. of the profit incentive.
C. the costs of additional units of aggregate output begin to rise more rapidly, causing firms to seek higher prices to cover these rising costs.
D. None of the choices are correct.
C. the costs of additional units of aggregate output begin to rise more rapidly, causing firms to seek higher prices to cover these rising costs.
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If a product has an external benefit, how does its marginal private benefit compare to its marginal social benefit?
A) Marginal private benefit is less than marginal social benefit. B) Marginal private benefit is greater than marginal social benefit. C) At low quantities, marginal private benefit is less than marginal social benefit but at high quantities, marginal private benefit is greater than marginal social benefit. D) At low quantities, marginal private benefit is greater than marginal social benefit but at high quantities, marginal private benefit is less than marginal social benefit. E) Marginal private benefit cannot be compared to marginal social benefit.
The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was
A) the high levels of unemployment that occurred during the Great Depression. B) the presence of both high unemployment and high inflation during the 1970s. C) the theoretical proof that classical ideas were invalid. D) the evidence that classical ideas were useful during economic booms, but not during economic recessions.
The formula for AVC is
A. ?TVC/?q. B. q/TVC. C. TVC/q. D. ?q/?TVC.
________ extended the government's authority to ban vertical and conglomerate mergers.
A. The Federal Trade Commission Act B. The Clayton Act of 1914 C. The Sherman Antitrust Act of 1890 D. The Celler-Kefauver Act of 1950