The cost curve that shows the lowest per unit cost of producing any given level of output is called:
a. the long run average cost curve.
b. the long run marginal cost curve.
c. the average variable cost curve.
d. the average fixed cost curve.
a
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Microeconomic models are used to
A) make predictions. B) explain real-life phenomena. C) evaluate policy alternatives. D) All of the above.
Bogo has just discovered that the marginal revenue product generated by the last worker hired was $125 while the marginal factor cost was $110. What should Bogo do?
A. Leave the level of production unchanged. B. Increase the amount produced. C. Reduce the amount produced. D. Collect more information before making a decision.
The short-run Phillips curve illustrates ________ relationship between the unemployment rate and the inflation rate
A) a mixed B) an upside-down U-shaped C) a positive D) no E) a negative
Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary