Refer to the graph shown. If hamburgers are produced by a perfectly competitive industry with a market demand D:
A. output will be the same as it would be under monopoly.
B. price will equal $6.
C. price will equal marginal cost.
D. price will be greater than marginal revenue.
Answer: C
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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
If Spain is capable of producing either tapas or soccer balls or some combination of those two products, then Spain should:
A. produce the good it has an absolute advantage in producing. B. produce the good it has a comparative advantage in producing. C. remain self-sufficient if it can produce both efficiently. D. trade only if it possesses the absolute advantage in the production of both goods.
Describe the decision for a perfectly competitive employer in determining the profit maximizing quantity of labor to employ
Because automatic stabilizers lower transfer payments and raise tax receipts as an economy recovers from a recession, they:
A. slow down the pace of an economic recovery. B. accelerate the recovery from a recession until inflation starts to develop, at which point they slow the recovery. C. do not affect the pace of an economic recovery. D. increase the pace of an economic recovery.