How does aggregate demand curve (AD) differ from an individual demand curve (D)?
A) AD is generally vertical while D is usually downward sloping.
B) D represents the price-quantity relationship for a single good or service while AD looks at the entire economic system.
C) AD is generally a downward sloping curve while D usually slopes upward.
D) Look for D in macroeconomic analyses and for AD in microeconomics.
B
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If the firms in a market have constant returns to scale internally while there are external economies of scale for the industry, a firm's long-run supply curve will be ________ and the long-run market supply curve will be ________
A) downward sloping; downward sloping B) upward sloping; horizontal C) horizontal; downward sloping D) downward sloping; horizontal E) upward sloping; downward sloping
If the government levies a specific tax on tobacco producers, the spending of consumers will probably
A) increase. B) decrease. C) remain unchanged. D) depend on supply elasticity.
Prohibiting price increases in situations of true scarcity
A. prevents the market mechanism from reallocating resources more efficiently. B. discourages production. C. may lead to extreme shortages of vitally needed products. D. All of the responses are correct.
If the marginal cost were $14, output would be
A. 1.
B. 2.
C. 3.
D. 5