What does it mean when the products sold by the firms in an industry are homogeneous?
A. The product sold by one firm is a perfect substitute of the product sold by another firm in the same industry.
B. Firms in the industry can produce the same product with different inputs.
C. The product sold by one firm is a perfect complement of the product sold by another firm in the same industry.
D. All firms in the industry are identical in size.
Answer: A
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Use the figure below to answer the following question.
If actual production and consumption occur at Q2
A. there is deadweight loss of d. B. there is deadweight loss of f. C. consumer surplus and producer surplus is maximized. D. economic surplus is below the maximum.
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
A deep recession hits the world economy, and real GDP in the rest of the world decreases. In the United States,
A) aggregate supply increases and aggregate demand decreases, so the effect on the price level is uncertain. B) aggregate supply and aggregate demand both decrease, and the price level rises. C) aggregate supply and aggregate demand both increase, and the price level rises. D) aggregate supply decreases while aggregate demand does not change, and the price level rises. E) aggregate demand decreases while aggregate supply does not change, and the price level falls.
Use the aggregate expenditures model and the following values to answer the next question. AMPCIGT$7500.5$1,000$1,000$500Determine equilibrium real GDP for this economy.
A. $5,000 B. $5,500 C. $4,000 D. $4,500