Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
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The average product is the greatest in the short run when the
A) total product is maximized. B) marginal product is equal to zero. C) marginal product is maximized. D) marginal product is equal to the average product. E) marginal product is greater than the average product.
People consume more fresh fruit in the summer than during the rest of the year, yet the prices of fresh fruit are lower in the summer than in other seasons. What accounts for this?
A) Fresh fruit is not subject to the law of supply. B) The supply of fresh fruit increases in the summer. C) Fresh fruit is an inferior good. D) Fresh fruit is not subject to the law of demand.
Which of the following groups has the lowest life expectancy at birth?
a. middle-income economies b. low-income economies c. high-income economies d. sub-Saharan African economies e. all the world's economies
The short-run break-even price
A. occurs at the output at which the firm yields a below normal rate of return. B. occurs at the output at which the firm yields a positive economic profit. C. is the price at which the firm's current liabilities are paid off. D. is the price at which a firm's total revenues equal total costs.