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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Which is the most important form of business organization in terms of total sales?
a. Sole proprietorship b. Corporation c. Partnership d. Cooperative
Suppose a firm experiences lower average costs whenever output increases in the long run. Then we would expect the firm to have:
A. a U-shaped long-run average cost curve. B. an L-shaped long-run average cost curve. C. a long-run average cost curve that always decreases. D. a minimum efficient scale relatively close to the origin.
Assume the graph shown represents Dana's budget constraint. If Dana's income to spend on these two items decreased, which of the following could be said?
A. Dana will derive more utility from each item, because she values each one more now that she's poorer. B. Dana will be able to buy less of both goods. C. Dana will buy more hairbands now because they are relatively less expensive. D. All of these are true.
A distinguishing characteristic of public transfer payments is that:
A. They include wages to government workers B. They are counted as part of government purchases in the calculation of the gross domestic product C. They include the cost of maintaining public parks D. They involve no contribution to current production in return