Other things the same, an increase in taxes shifts aggregate demand to the left. In the short run this makes output fall which makes the interest rate rise
a. True
b. False
Indicate whether the statement is true or false
False
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Diminishing marginal utility of wealth leads to risk aversion because at a given level of wealth a dollar gained
A) is worth more in additional utility than a dollar lost. B) is worth less in additional utility than a dollar lost. C) is worth as much in additional utility as a dollar lost. D) does not add to total utility.
The minimum average cost of producing alternate levels of output, allowing for optimal selection of all variables of production is defined by the:
A. long-run average total cost curve. B. short-run marginal cost curve. C. long-run marginal cost curve. D. short-run average fixed cost curve.
One can tell that Figure 8.4 shows short run costs because:
A. the slope of total costs and variable costs are the same. B. costs are rising. C. total costs are positive when output is zero implying fixed costs. D. All of these.
Many professional sports athletes have incentive clauses in their contracts. These indicate that
A) the team owner has asymmetric information. B) the athlete might engage in moral hazard, which the team owner wishes to avoid. C) the athlete might engage in adverse selection, which the team owner wishes to avoid. D) the athlete has stronger negotiators.