Which of the following statements is TRUE?
A) In the long run, the average cost curve is always downward sloping.
B) In the long run, the quantities of all inputs are fixed.
C) In the long run, the firms' fixed costs are greater than its variable costs.
D) In the long run, all costs are variable costs.
D
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During a recession, higher welfare outlays:
a. increase the size of the budget deficit even if the government does not undertake discretionary fiscal policy. b. decrease the size of the budget deficit regardless of the government's discretionary fiscal policy c. increase the size of the budget deficit only if the government undertakes discretionary fiscal policy. d. decrease the size of the budget deficit only if the government undertakes discretionary fiscal policy. e. have the same effect on the budget deficit as they do in times of expansion.
The short-run aggregate supply curve slopes upward because: a. firms normally can purchase some inputs at prices that are temporarily fixed in the short run. b. firms seek maximum profits and always try to increase output in the short run
c. firms purchase inputs that increase in price as the price level rises in the short run. d. All of the above are correct.
If the increase in government spending is $500 and the marginal propensity to consume is 0.75, then the change in real gross domestic product will be _____
a. $2,000 b. $500 c. $1,500 d. $1,000
$20 is to be divided among two individuals—Gary and Jamie. Which of the following allocations is NOT Pareto efficient?
A) Gary receives $1, and Jamie receives $19. B) Gary receives $19, and Jamie receives $1. C) Gary receives $8, and Jamie receives $9. D) Gary receives $15, and Jamie receives $5.