Because a change in consumer spending is positively related to a change in income, the slope of the aggregate demand function is:
a. 0.
b. 1.
c. equal to the MPC.
d. equal to the marginal propensity to save.
Ans: c. equal to the MPC.
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
If Slick Shades has a constant marginal cost of production equal to $80 and the distributors have a constant marginal cost of distribution equal to $30, what is the profit-maximizing number of sunglasses (in hundreds) for Slick Shades to produce?
The figure above shows the wholesale demand and marginal revenue curves for Slick Shades Sunglasses, a sunglasses firm with market power. Slick Shades Sunglasses has a constant marginal cost of production and it sells to perfectly competitive independent retail distributors that have a constant marginal cost of distribution.
A) 40
B) 80
C) 55
D) 60
The elasticity of demand for a normal good: a. is often higher in the short run than in the long run. b. is often lower in the short run than in the long run. c. is the same in the short run as in the long run
d. is zero in the short run and infinite in the long run.
What are the three properties of money?
What will be an ideal response?