If firms maintain preset prices in the short run, then the primary cause of output gaps is changes in:
A. prices.
B. potential output.
C. capital and technology.
D. economy-wide spending.
Answer: D
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A consumer maximizes her total utility from a bundle of goods when her marginal utility from each good is equal
Indicate whether the statement is true or false
A perfectly competitive firm faces a market clearing price of $150 per unit. Average total costs are at the minimum value of $120 per unit at an output rate of 70 units. Marginal cost equals $150 per unit at an output rate of 75 units
It can be concluded that the short-run profit-maximizing output rate is A) 75 units, at which the firm earns zero economic profits per unit sold. B) 75 units, at which the firm earns negative economic profits per unit sold. C) 75 units, at which the firm earns positive economic profits per unit sold. D) 70 units, because price is less than average total costs.
Individuals who face greater risks
a. are more likely to purchase insurance b. are less likely to purchase insurance c. are neither more nor less likely to purchase insurance d. are risk neutral
Refer to the graph below. The movement from __________ to __________ is consistent with a successful advertising campaign that claims wool keeps you warm.
a. Point A; Point B
b. Point A; Point F
c. Point A; Point D
d. Point A; Point H