Refer to the graph below. Assume that the economy is initially at equilibrium at point A. If there is a recession in the economy because AD1 shifts to AD2, and wages and prices are flexible, then in the long run the price level will be:
A. P2, and real output will be Qf
B. P3, and real output will be Qf
C. P1, and real output will be Qf
D. P2, and real output will be Q1
B. P3, and real output will be Qf
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You are the new vice president in charge of advertising at Taco Bell. In your upcoming advertising campaign, you plan to degrade the fast food competitor whose product is the closest substitute for Taco Bell's tacos
That would be the fast food chain whose cross elasticity of demand with your tacos is equal to A) negative 2.11. B) negative 1.75. C) positive 1.55. D) positive 1.00.
The table shows the PPF of an island community. Choose the best state-ment
A. This community has enough resources to produce 2 pounds of fish and 36 pounds of berries. B. This community cannot produce 2 pounds of fish and 36 pounds of berries because this combination is inefficient. C. This community will waste resources if it produces 2 pounds of fish and 22 pounds of berries. D. This community can produce 2 pounds of fish and 30 pounds of berries but this combination is inefficient.
Economic inefficiency exists when
A) P = MR. B) P = MC. C) MR = MC. D) P > MC.
A subsidy in an industry would be likely to increase the consumer surplus for buyers in that industry and increase the producer surplus for sellers in that industry
a. True b. False Indicate whether the statement is true or false