Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher
B. higher; potential
C. lower; higher
D. lower; potential
Answer: B
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When a firm is experiencing economies of scale
A. long-run average total cost is decreasing. B. minimum efficient scale has been achieved. C. a given percentage increase in output requires a more-than-proportionate increase in resources. D. an increase in output is accompanied by a more-than-proportionate increase in long-run average total cost.
In a sense, a cartel is self-destructive because
A) it reduces consumer surplus. B) it sets price above marginal cost. C) each cartel member has the incentive to cheat on the cartel. D) each cartel member earns economic profit.
If we are interested in knowing whether a poor country is improving economically, we want to know not only what the economic growth rate is, but also
A. whether the lowest income groups are benefiting from the growth. B. whether government spending is growing at the same rate. C. whether the economic growth rate is greater than last year's rate. D. whether the economic growth rate is faster than other nations' growth rates.
If the MPS is 0.1, the tax multiplier is
A. 10. B. -5. C. -9. D. -10.