Use the following graph to answer the next question.
Suppose the economy is in equilibrium at point B. A decrease in government purchases would most likely
A. move the economy downward from point B along AD2.
B. move the economy from point B toward point A.
C. move the economy upward from point B along AD2.
D. move the economy from point B toward point C.
Answer: D
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Which of the following statements about the concept of opportunity cost is true?
A. The opportunity cost of a decision is the cost of all possible alternatives to the good produced. B. Many decisions do not involve an opportunity cost. C. If you have an economics final and an American history final tomorrow, the opportunity cost of studying five hours for your economics exam is the five hours you cannot study for your history exam. D. The opportunity cost of a college education at a school where you have to drive 100 miles per week is the cost and maintenance of owning an automobile to drive to and from school.
Answer the next question on the basis of the following data.OutputTotal Cost0$24133241348454561669The marginal cost associated with the production of the sixth unit of output is
A. $12. B. $8. C. $24. D. $16.
All of the following actions shift the aggregate demand curve to the right EXCEPT
A) the Fed raises the interest rate. B) an increase in government transfer payments. C) inflation is expected to rise next year. D) an increase in expected future profit. E) a decrease in taxes.
Which of the following individuals first discovered the relationship between unemployment and inflation for the United States?
A) Solow and Friedman B) Samuelson and Solow C) Friedman and Phillips D) Friedman and Phelps