Given the above graph, as you move from point A to point B,

A. output is unchanged.
B. cost is unchanged.
C. the rate at which the firm can substitute labor for capital while holding output constant decreases.
D. both a and b
E. both a and c


Answer: E

Economics

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A) $22 billion; inflationary gap B) $22 billion; recessionary gap C) $28 billion; inflationary gap D) $28 billion; recessionary gap E) $25 billion; equilibrium

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Demand for a good becomes more elastic as:

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