The output level is constant along any isoprofit line.
Answer the following statement true (T) or false (F)
False
Rationale: Profit is constant along isoprofit lines.
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Even when the demand for one good is high, the price of the good is also affected by supply. The textbook illustrates this by comparing the price of two items that were auctioned on the same day
Which of the following describes the results of the auction? A) A letter written by Abraham Lincoln sold for a higher price than a letter written by John Wilkes Booth. B) A letter written by John Wilkes Booth sold for a higher price than a letter written by Abraham Lincoln. C) A letter written by Abraham Lincoln was sold for a higher price than a letter written by Adam Smith. D) A letter written by John Wilkes Booth sold for a higher price than a letter written by Lee Harvey Oswald.
The longer the time frame involved, the more likely it is that the demand will be relatively
A) elastic. B) inelastic. C) steep. D) flat.
In the long run
a. both supply and demand shocks have permanent effects on real GDP. b. real GDP can remain below potential. c. real GDP can remain above potential. d. both supply and demand shocks have no effect on real GDP. e. supply shocks have permanent effects on real GDP but demand shocks have no effect.
If an economy's consumption spending is $5 trillion, investment is $2 trillion, government spending is $1 trillion, net taxes are $1 trillion and household saving is $2 trillion, total income is
a. $3 trillion b. $5 trillion c. $7 trillion d. $8 trillion e. $11 trillion