When compared to the profit-maximizing price and quantity supplied, an average-cost pricing policy for a natural monopoly causes the price the monopolist charges to ________ and the quantity it sells to ________.
A. increase; decrease
B. decrease; decrease
C. decrease; increase
D. increase; increase
Answer: C
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The total demand for goods and services at a given price level is also known as
A) autonomous consumption. B) the consumption function. C) equilibrium output. D) planned expenditures.
Consumer surplus is equal to
A) marginal benefit minus price summed over the quantity consumed. B) price minus marginal benefit summed over the quantity consumed. C) marginal benefit summed over the quantity consumed. D) price multiplied by the quantity consumed. E) marginal benefit plus price summed over the quantity consumed.
Assume that for the second quarter of 2012, actual real GDP was $125.5 billion and potential real GDP was $142.7 billion. According to Okun's law, the cyclical unemployment rate during the second quarter of 2012 was
A) 5.7%. B) 6.0%. C) 6.9%. D) 7.4%.
Assume there is a multiplier effect, some crowding out, and no accelerator effect. An increase in government expenditures changes aggregate demand more,
a. the smaller the MPC and the stronger the influence of income on money demand. b. the smaller the MPC and the weaker the influence of income on money demand. c. the larger the MPC and the stronger the influence of income on money demand. d. the larger the MPC and the weaker the influence of income on money demand.