If a supplier faces a perfectly horizontal demand curve and sets his price slightly higher than the demand curve itself, he can expect
a. no change in his total revenues
b. everyone to begin buying his product
c. a complete loss of revenues
d. a new demand curve
e. a relative increase in income
C
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
A point outside a production possibilities frontier indicates
A) that resources are not being used efficiently. B) an output combination that society cannot attain given its current level of resources and technology. C) that resources are being used very efficiently. D) that both goods are characterized by increasing costs.
The household budget constraint may have a kink because
A) there is uncertainty. B) households prefer diversity. C) households may substitute consumption for leisure, or the reverse. D) leisure is limited by the number of available hours.
Fast Food Terminals III After firing cashiers to install touchscreens for patrons to place orders, Taco Casa determined that their average cost per touchscreen order was $0.65 . After determining that the average compensation cost per human mediated order was $0.60 per order, they revert back to human order takers. Then why did the realized average cost per order with humans come in at $0.70?