In the long run, total spending affects ________, and output is determined by ________.
A. prices; meeting demand at preset prices
B. inputs and productivity; prices
C. inputs and productivity; total spending
D. prices; inputs and productivity
Answer: D
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When the price of a good is below its average variable cost, a perfectly competitive firm is better off ceasing production. In this case, it suffers a loss equal to its _____
a. fixed cost b. average variable cost c. marginal cost d. total variable cost
Build-Right Concrete Products produces specialty cement used in construction of highways. Build-Right is a price-setting firm and estimates the demand for its cement by the State Highway Department using a demand function in the nonlinear form:Q = aPbMc
where Q = yards of cement demanded monthly, P = the price of Build-Right's cement per yard, M = state tax revenues per capita, and PR = the price of asphalt per yard. The manager at Build-Right transforms the nonlinear relation into a linear relation for estimation. The estimation results are presented below: 
height="198" width="577" />Given the above, if Build-Right decides to charge the State Highway Department $55 per yard for its cement when tax revenues per capita are $3,200 and the price of asphalt is $35 per yard, the expected quantity demanded is A. 6,000 yards of cement. B. 1,000 yards of cement. C. 2,000 yards of cement. D. 8,000 yards of cement. E. 4,000 yards of cement.
In a promissory note, which clause calls for all payments being due immediately in the case of default?
a. defeasance b. acceleration c. due on sale d. prepayment
Refer to the graph below. Assume that the economy is initially in equilibrium at the intersection of AD1 and AS1. Suppose that there is economic growth which shifts AS1 to AS2. If the application of a monetary rule is designed to shift AD1 to AD3, but because of pessimistic business expectations AD1 only shifts to AD2, then mainstream economists would suggest that the actions to be taken to avoid deflation would be to implement a(n):
A. Expansionary fiscal policy and a tight money policy
B. Contractionary fiscal policy and a tight money policy
C. Expansionary fiscal policy and an easy money policy
D. Contractionary fiscal policy and an easy money policy