Long-run aggregate supply is
A. the possible combinations of real GDP and inputs after full adjustments have been made.
B. the extraction of natural resources.
C. all of the physical and human resources in the economy.
D. the real production of goods and services after full adjustments have been made.
Answer: D
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Necessities such as food and shelter have inelastic demand.
Answer the following statement true (T) or false (F)
The fact that many people drive faster than the posted speed limit suggests that
A) not all price floors are enforceable. B) not all price and quantity regulations are enforceable. C) individual drivers act irrationally. D) government regulation is utterly useless.
Thurman is a writer who works from his home. Thurman lives next door to Phil, the drummer for a local band. Phil needs a lot of practice to earn $250, which is his share of the band's profit. Thurman gets distracted by Phil's drumming but he needs to get his writing done to earn $500 for his current article. Which of the following is an efficient solution?
a. Phil offers Thurman $499 to allow Phil to continue drumming. Thurman accepts and both are better off. b. Phil offers Thurman $249 to allow Phil to continue drumming. Thurman accepts and both are better off. c. Thurman offers Phil $251 to stop practicing his drumming. Phil agrees and both are better off. d. Thurman offers Phil $501 to stop practicing his drumming. Phil agrees and both are better off.
Drug companies are willing to spend millions of dollars on developing new drugs because
A.) their research will drive their competitors out of business. B.) they can patent the new drug and have a monopoly on its production and sale. C.) they can raise the prices on older drugs whose patents have expired. D.)they can produce unlimited quantities of the new drug.