If aggregate demand shifts to the left by $400 billion and aggregate supply is upward-sloping, then real output will decrease by
A. More than $400 billion, and the price level will not change.
B. $400 billion, and the price level will not change.
C. Less than $400 billion, and the price level will fall.
D. $400 billion, and the price level will fall.
Answer: C
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Refer to the game between James and Theodore depicted in Figure 12.1. Who has a dominant strategy?
A. Only James
B. Only Theodore
C. Both James and Theodore
D. Neither James nor Theodore
The introduction of new technologies that allow producers to specialize in those activities in which they are relatively more efficient is an example of how overall productivity increases because of the:
A. equilibrium principle. B. principle of comparative advantage. C. scarcity principle. D. incentive principle.
The social cost of production is:
A. the private cost of production plus the external cost generated by production. B. the external cost generated by production. C. the private cost of production that is greater than the benefit of production. D. the external cost of production that is greater than the benefit of production.
A monopolist will hire an additional unit of labor as long as
A) the additional cost of the worker is outweighed by the additional revenues made from selling the output of theses workers. B) the marginal revenue curve is above the demand curve. C) the marginal revenue product is larger than the marginal factor cost. D) the marginal revenue product is less than the marginal factor cost.