Since a long run consists of many short runs, the classical model is
a. incorrect every time we look at output data
b. accurate during the short run
c. paradoxically quite accurate in the long run; however, it is not very accurate in the short run
d. our best guide to fluctuations in the economy
e. paradoxically quite accurate in the short run; however, it is not very accurate in the long run
C
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In markets free from intervention, prices tend to move towards equilibrium because of
A) the "helping hand" of government. B) increased demand from buyers. C) increased supply by sellers. D) the unintended consequences of choices among buyers and sellers pursuing their own plans.
Subsidies paid to the health care industry for Medicare patients are paid by
A) Congress. B) the Teamsters union. C) current taxes. D) the Federal Reserve.
When fixed costs are ignored because they are irrelevant to a business's production decision, they are called
a. explicit costs. b. implicit costs. c. sunk costs. d. opportunity costs.
Economic profit is equal to
a. total revenue minus the explicit cost of producing goods and services. b. total revenue minus the implicit cost of producing goods and services. c. total revenue minus the opportunity cost of producing goods and services. d. average revenue minus the average cost of producing the last unit of a good or service. e. total revenue minus depreciation.