If total spending rises from one year to the next, then which of the following could not be true?
a. the economy is producing a smaller output of goods and services, and goods and services are selling at higher prices.
b. the economy is producing a larger output of goods and services, and goods and services are selling at lower prices.
c. the economy is producing a larger output of goods and services, and goods and services are selling at higher prices.
d. the economy is producing a smaller output of goods and services, and goods and services are selling at lower prices.
d
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Consider a perfectly competitive firm with MC = 10 + q. If market demand is Q = 100 - P and the current industry output is 80 units, then the firm will produce
a. zero units. b. 10 units. c. 20 units. d. the answer cannot be determined without knowing what the supply curve is.
Output per worker must be ________ output per person.
A. less than or equal to B. no more than half the size of C. equal to D. greater than or equal to
Contestable markets improve the performance of imperfect markets with
a. government regulations. b. the threat of entry. c. advertising. d. tacit collusion.
If bagels and doughnuts are substitutes, then a decrease in the price of doughnuts will result in
A. An increase in the demand for doughnuts. B. A decrease in the demand for bagels. C. A decrease in the demand for doughnuts. D. An increase in the demand for bagels.