The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run
a. True
b. False
Indicate whether the statement is true or false
True
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The price of a firm's product is $8 and the firm faces a constant marginal cost of $5 that is equal to its (constant) average total cost. If the firm does not sell a unit of its product on the day it was produced, it is sold in a secondary market for a price of $2. If the firm does not sell a unit of its product on the day it was produced, there is a ________ of ________ per unit not sold.
A) loss; $3 B) profit; $3 C) profit; $5 D) loss; $2
The division of a resource's earnings between economic rent and opportunity cost depends on the resource owner's
a. elasticity of labor supply b. price elasticity of labor demand c. income elasticity of labor demand d. cross-price elasticity of demand e. marginal revenue product
Government spending is a leakage out of the circular flow of income and spending
a. True b. False Indicate whether the statement is true or false
The open access equilibrium for a common property resource occurs at the point where
a. Average revenue equals marginal cost b. Total social benefits are maximized c. Total private benefits are maximized d. Marginal revenue equals marginal cost e. Marginal revenue equals total costs