Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1.
B. P2 and Y1.
C. P2 and Y3.
D. P1 and Y2.
Answer: B
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Marginal cost is the opportunity cost of producing
A) every unit possible. B) zero units. C) the first unit and only the first unit. D) one more unit of a good or service. E) None of the above answers is correct.
What is an average cost pricing rule? Why do regulatory agencies use it for natural monopolies?
What will be an ideal response?
An increase in all of the following will increase aggregate demand EXCEPT
A) investment. B) savings. C) exports. D) government spending.
The competitive firm's profit-maximizing quantity of labor is the quantity where the:
A. quantity of the marginal product of labor is equal to the market wage. B. value of the marginal product of labor is equal to the market wage. C. quantity of the marginal product of labor is equal to zero. D. value of the marginal product of labor is equal to the profit.