The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B
B. recessionary; C
C. recessionary; A
D. expansionary; A
Answer: C
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Describe the general types of barriers
What will be an ideal response?
An increase in production of one good will have zero opportunity cost only if the economy initially existed at a point inside the production possibilities curve
a. True b. False Indicate whether the statement is true or false
One of the reasons fewer antitrust cases have been brought before the courts is:
A. the rate of technological change has accelerated. B. input prices have fallen significantly. C. firms have become increasingly larger. D. the United States is engaged in more trade wars.
Suppose a paper mill earns $1,000,000 in profits when it pollutes a river, and it can abate pollution at a cost of $A. The effects of the pollution are confined to a single farmer who earns $400,000 if the water he uses from the river is clean and $300,000 if it's polluted. Which of the following expressions gives the combined profit of both firms with abatement?
A. $(1,300,000 - A) B. $(1,400,000 - A) C. $(700,000 + A) D. $(1,700,000 - A)