For a given level of inflation, if a resolution of international disputes leads to a cutback in government military spending, then the ________ shifts ________.
A. short-run aggregate supply line; downward
B. short-run aggregate supply line; upward
C. aggregate demand curve; left
D. aggregate demand curve; right
Answer: C
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A cartel is a situation where firms in the industry
a. have an agreement to restrict output. b. agree to produce identical products. c. obey the rules of dominant firm price leadership. d. experience the pain of a kinked demand curve. e. have a barometric price leader
The shape of a firm's long-run average cost curve is determined by:
a. the degree to which each input encounters diminishing marginal productivity. b. the underlying nature of the firm's production function when all inputs are able to be varied. c. how much the firm decides to produce. d. the way in which the firm's expansion path reacts to changes in the rental rate on capital.
Answer the following statement(s) true (T) or false (F)
1.The multiplier effect causes the ultimate increase in total purchases to be greater than the initial increase. 2.The marginal propensity to consume is the fraction of additional disposable income that a household consumes rather than saves. 3.The 2008–2009 recession was the mildest recession since the Great Depression. 4.Since the 1930s, economic stabilization policies have focused primarily on the supply side of the economy. 5.Economist Arthur Laffer invented a graphic demonstrating the effect of tax rates on government revenue.
Refer to the graph shown of a monopolistically competitive firm. If the firm maximizes profit, it will earn:
A. zero economic profit this year. B. $84,000 economic profit this year. C. $320,000 economic profit this year. D. $56,000 economic profit this year.