Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C
B. D; B
C. A; B
D. B; C
Answer: B
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Which of the following best describes the capture theory of regulation?
i. Regulation seeks an efficient use of resources. ii. Regulation is aimed at keeping prices as low as possible. iii. Regulation helps firms maximize economic profit. A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii
Tobacco could not be grown in England. It could only be produced in the colonial South
Indicate whether the statement is true or false
When choosing between fair price and marginal cost regulation for a natural monopoly, regulators must choose between
a. c and d b. c and e c. two different price and quantity combinations d. efficiency and equity e. possible cost drift and subsidization
A dominant strategy is one that always produces the maximum profits for both firms.
Answer the following statement true (T) or false (F)