A firm will continue to produce in the short run even though economic profits are negative as long as
A. it earned positive economic profits last year.
B. the amount of the loss is no greater than the amount of fixed cost.
C. it has fixed obligations to pay.
D. MC = MR.
Answer: B
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
In the Classical system, the total output of goods and services and total employment are determined by all of the following except
A) the interest rate. B) the labor force. C) the supply of capital. D) existing technology.
Which of the following statements is true?
a. The most important source of revenue to the federal government is personal income taxes. b. The most important source of revenue to state governments are sales and property taxes. c. The most important source of revenue to local governments are local property taxes. d. The taxation burden, measured by taxes as a percentage of GDP, is lighter in the United States than in most other advanced industrial countries. e. All of these.
What does a consumption possibilities frontier represent?