Use the following graph to answer the next question.
In the above graph it is assumed that investment, net exports, and government expenditures
A. vary inversely with real GDP.
B. are all increasing.
C. vary directly with real GDP.
D. are independent of real GDP.
Answer: D
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Increasing the income tax rate ________ the ________
A) does not change; supply of labor B) decreases; supply of labor C) increases; supply of labor D) decreases; demand for labor E) increases; demand for labor
Price leadership:
A) has rarely occurred in U.S. history. B) is always illegal in the United States. C) is usually the result of a dominant firm in the industry. D) usually results in the smaller firms in the industry incurring economic losses.
An arms race is an example of a _____
a. positive externality b. inframarginal positive externality c. Coasean solution d. prisoners' dilemma
Which of the following explains why long-run average total cost at first decreases as output increases?
a. diseconomies of scale b. less efficient use of lumpy inputs c. fixed costs become spread out over more units of output d. gains from specialization of inputs e. marginal costs rise at a slower rate than average costs in the short run