____________is the cost that a business incurs even when the plant is idle and output is zero.
Fill in the blank(s) with the appropriate word(s).
Ans: fixed cost
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How do car dealers help reduce adverse selection?
What will be an ideal response?
With reference to the graph above, if the intended aim of the price ceiling shown was a net increase in the well-being of consumers, then positive analysis would conclude:
A. the policy was effective, since area A + C is larger than B + D.
B. the policy was effective, since area B is smaller than area D.
C. the policy was ineffective, since D is larger than E.
D. the policy was ineffective, since A + C + D is larger than B + E.
A decrease in supply will cause
a. an increase in demand. b. a decrease in demand. c. an increase in quantity demanded. d. a decrease in quantity demanded. e. a decrease in equilibrium price.
If crowding out exists, contractionary fiscal policy will cause the aggregate demand curve to shift in by more than indicated by the government spending multiplier
a. True b. False Indicate whether the statement is true or false