Briefly explain why the SRAS curve is initially horizontal in the Keynesian model.
What will be an ideal response?
Since the economy is producing an output far below potential GDP, it is easy to increase production in response to a small price change
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Normal profit
A) is when economic profits are zero. B) is the profit that competition will allow. C) is the opportunity cost of capital. D) all of these choices.
____________________ - a perfectly competitive price system will bring about an economically efficient allocation of resources
Fill in the blank(s) with the appropriate word(s).
Which of the following examples would most likely involve an economist?
a. studying chimpanzees in a natural habitat b. studying chimpanzees in a laboratory c. studying people in a controlled environment d. studying people in a mall
Refer to the data. When two workers are employed:
A. total product is 20.
B. total product is 18.
C. average product is 10.
D. total product cannot be determined from the information given.