Suppose that Firestone Tires buys raw rubber for $5,000 and then uses this to make tires it sells for $20,000 . As a result, GDP has risen by:
a. $20,000
b. $5,000
c. $15,000
d. $25,000
A
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A firm in monopolistic competition can determine what price to charge for its product because of
A) barriers to entry. B) economies of scale. C) product differentiation. D) the fact there are many buyers.
Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. If the market price is 2 cents per page, what is Fast Copy's economic profit?
A) zero B) between 0 and $0.50 per hour C) between $0.51 and $1.00 per hour D) more than $1.00 per hour
In the long-run ISLM model and with everything else held constant, the long-run effect of a contractionary fiscal policy is to ________ real output and ________ the interest rate
A) not change; not change B) decrease; decrease C) decrease; not change D) not change; decrease
An individual who is only willing to pay a relatively low amount for a particular good
A) would fall in the upper portion of the demand curve. B) would fall in the middle portion of the demand curve. C) would fall in the lower portion of the demand curve. D) would not be considered part of the demand curve.