Aggregate output will decrease if there is a(n)
A. unplanned fall in inventories.
B. decrease in consumption.
C. unplanned rise in inventories.
D. increase in saving.
Answer: C
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Negative output gap indicates that
A) the actual real GDP is above natural real GDP. B) the actual real GDP is below natural real GDP. C) nominal GDP is above real GDP. D) nominal GDP is below real GDP.
When a random demand and marginal cost are linear, producing the quantity at which the marginal cost equals the ________ maximizes ________.
A) expected marginal revenue; expected profit B) marginal revenue; profit C) marginal revenue; expected profit D) expected marginal revenue; profit
Firms in long-run equilibrium in a perfectly competitive industry will produce at the low points of their average total cost curves because:
a. free entry implies that long-run profits will be zero no matter how much each firm produces. b. firms seek maximum profits and to do so they must choose to produce where average costs are minimized. c. firms maximize profits and free entry implies that maximum profits will be zero. d. firms in the industry desire to operate efficiently.
Indifference curves typically a. cross each other
b. have a positive slope. c. are convex from the origin. d. are concave from the origin.