If ________, then a profit-maximizing, monopolistically competitive firm earns positive economic profits.
A. P = ATC
B. P > ATC
C. P < ATC
D. All of the above are possible.
Answer: B
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The Fed can surely reduce the rightward shift of the AD curve, but
a. stock and bond prices may fall dramatically b. inflation may rise sharply c. inflation would change in an unpredictable fashion d. recession may result e. unemployment may fall to below the natural rate
Suppose the market consists of 3 individuals: Citizen A, Citizen B and Citizen C. 
If the good shown on the graphs is a public good, and the marginal cost of providing each unit is constant and equal to $5, then what is the optimal quantity of the public good?
A. 50 units B. 30 units C. 20 units D. 40 units
Which of the following statements is true?
A) The relationship between labor demand and wage rate and the relationship between labor supply and wage rate are both positive. B) The relationship between labor demand and wage rate and the relationship between labor supply and wage rate are both negative. C) The relationship between labor demand and wage rate is positive, whereas the relationship between labor supply and wage rate is negative. D) The relationship between labor demand and wage rate is negative, whereas the relationship between labor supply and wage rate is positive.
In the above figure, the short-run aggregate supply curve is SAS and the aggregate demand curve is AD. A recessionary gap exists
A) if the long-run aggregate supply curve is LAS1. B) if the long-run aggregate supply curve is LAS2. C) if the long-run aggregate supply curve is LAS3. D) All of the above answers are correct.