Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. higher; potential
D. lower; higher
Answer: A
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One of the potential upsides of contractionary fiscal policy is a reduction in
A. tax revenues. B. unemployment. C. output. D. payments on the national debt.
Refer to Figure 7-2. With the tariff in place, the United States consumes
A) 18 million pounds of coffee. B) 20 million pounds of coffee. C) 26 million pounds of coffee. D) 38 million pounds of coffee.
The law of increasing costs states that the opportunity cost of producing a good increases as more of the good is produced
Indicate whether the statement is true or false
The following linear demand specification is estimated for Conlan Enterprises, a price-setting firm:Q = a + bP +cM +dPRwhere Q is the quantity demanded of the product Conlan Enterprises sells, P is the price of that product, M is income, and PR is the price of a related product. The results of the estimation are presented below: 
Assume that the income is $10,000, the price of the related good is $40, and Conlan chooses to set the price of this product at $30. At the prices and income given above, what is the income elasticity?
A. 0.21 B. 0.31 C. -1.62 D. 1.50 E. -0.87