Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher
Answer: B
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If Jacqueline is willing to accept $1 for a cupcake and Jameson is willing to pay $3 for a cupcake, and they negotiate a price of $2 for a cupcake, the cooperative surplus is
A) $1. B) $2. C) $3. D) $4.
Along a short-run aggregate supply curve, a decrease in the price level means that
A) more output is produced as consumer demand increases. B) less output is produced as firms decrease production. C) more output is produced as firms increase production because wages fall more than the price level falls, making it profitable to hire more workers. D) output does not change because firms do not change the quantity they produce.
In the above table, when 200 brownies are produced
A) marginal social benefit is greater than marginal social cost, and resource use is efficient. B) marginal social benefit is greater than marginal social cost, and there is a deadweight loss. C) marginal social benefit equals marginal social cost, and resource use is efficient. D) marginal social benefit is less than marginal social cost, and there is a deadweight loss.
Currently, the United States has an import quota on the amount of sugar that is allowed to be imported into the United States. What would happen to the price of sugar in the United States if the import quota was removed? What would happen to U.S
consumption and U.S. production of sugar?