The equilibrium point is at the intersection of the two curves because ______.
a. market demand equals market supply
b. market demand exceeds market supply
c. market demand is less than market supply
d. market demand is unrelated to market supply
a. market demand equals market supply
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Contractionary monetary policy should be used if:
A) aggregate demand-aggregate supply equilibrium is below potential output. B) aggregate demand-aggregate supply equilibrium is above potential output. C) aggregate demand-aggregate supply equilibrium is equal to potential output. D) none of the above.
Suppose that, in the long run, a dairy's variable costs are VC = 2Q2 (where Q is the number of gallons of milk produced each day), its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day. In the long run, there is free entry into the market. What is the dairy's total cost function?
A. TC = 2Q2 + 4Q B. TC = 4Q + 50 C. TC = 2Q2 + 50 D. TC = 2Q2 + 4Q + 50
Graphing the value of marginal product against the quantity of a given input hired looks like which of the following curves?
A. The total product curve B. The total revenue curve C. The demand curve D. The value product curve
If an industrial union is able to negotiate a wage above the competitive market-clearing wage, employment in the industry will increase
a. True b. False