In a one-person Robinson Crusoe economy, labor specialization
a. can shift the production possibilities curve to the right
b. is already present because Crusoe produces everything himself
c. can decrease production of all types of goods
d. cannot increase production
e. is impossible
E
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
The Keynesian recommendation for a policy response to a recession consists of
A. increased government spending with tax increases. B. increased government spending with tax cuts. C. decreased government spending with tax cuts. D. decreased government spending with tax increases.
An increase in the "Z" factors will decrease the equilibrium price level and decrease aggregate output, ceteris paribus.
Answer the following statement true (T) or false (F)
Assume dental care is provided by a competitive industry. A new government regulation requires each dentist to take a costly new exam for certification. What happens to the price of dental care?
a. The price of dental care rises in the short run and rises further in the long run. b. The regulation will cause higher prices in the short run, but it will have no long-run impact. c. There is no change in the short run, but dentists will exit and prices will rise in the long run. d. The exam is a sunk cost, so the price of dental care does not change in either the short run or the long run.