Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1.
B. P2 and Y1.
C. P2 and Y3.
D. P1 and Y2.
Answer: B
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If the market price falls below the bottom of the firm's ATC curve:
A. there is no level of output at which the firm can make a profit. B. the firm is earning profits. C. the market price must be lower than the firm's AVC. D. Total revenue must be higher than total cost.
Too much spending chasing too few goods best describes:
What will be an ideal response?
Which of the following is not a reason people choose to depend on others for goods and services?
a. to improve their lives b. to allow them to enjoy a greater variety of goods and services c. to consume more of each good without working any more hours d. to allow people to produce outside their production possibilities frontiers
An unregulated market economy provides material wealth but does not generate effective control of environmental damage.
Answer the following statement true (T) or false (F)