In the short-run macro model, which of the following increases when government spending increases?
a. The interest rate
b. Investment spending
c. Taxes
d. Spending on consumer durables
e. The money supply
A
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In the above, in which figure(s) is (are) the slope the same at every point?
A) Figure A only B) Figures A and C C) Figure B only D) Figures A, C, and D E) Figures C and D
An airline industry study recently reported, “Evidence is abundant that larger firms are not more efficient or less costly simply because they are larger. In fact, other things equal, the largest carriers tend to have a higher level of unit costs, possibly caused by the difficulties of managing an airline of large size.” This means that
A. there are increasing returns to scale in the airline industry. B. the airline industry has constant returns to scale. C. the larger airlines are not profitable. D. airlines are experiencing decreasing returns to scale.
When the benefits to society of using a product exceed benefits to the user,
a. the product should be strictly regulated b. the product should be taxed c. the product provides a positive externality d. the product is overproduced at the privately determined equilibrium e. in time the product will not be produced
As market price increases, in the short run, a profit-maximizing firm in a price-taker market will expand output along its
a. marginal cost curve. b. average total cost curve. c. average variable cost curve. d. market demand curve.