Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
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The above figure depicts the market for video games. If the government imposed a $3 per game tax on sellers, what would be the new equilibrium price paid by consumers after the tax?
A) less than $27 per game B) $27 per game C) more than $27 per game. D) More information is needed to determine if the price is more than, less than, or equal to $27 per game.
Marginal costs and marginal benefits
A) do not include sunk costs. B) include sunk costs. C) are really just fixed costs. D) are not useful in decision making.
Which of the following is an example of a good with a highly elastic demand curve?
a. Pencils b. Books c. Bread d. Sports vehicles
John is a U.S. citizen who works for Walmart located in France. John's work contributes to:
A. both U.S. GDP and U.S. GNP. B. U.S. GNP, but not U.S. GDP. C. neither U.S. GDP nor U.S. GNP. D. U.S. GDP, but not U.S. GNP.