Starting from long-run equilibrium, the long-run impact(s) of an increase in autonomous consumption, compared to the original equilibrium, is:
A. lower inflation and the same output.
B. higher inflation and higher output.
C. lower inflation and lower output.
D. higher inflation and the same output.
Answer: D
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A profit-maximizing monopolist will receive zero profits when
A. the average total cost curve lies above the demand curve for all possible rates of output. B. marginal revenue, marginal cost, and average total cost are all equal. C. the average total cost curve is tangent to the demand curve at the profit maximizing price. D. a second firm enters the industry.
In order to minimize the NET costs associated with crime,
A. no crime should be eliminated. B. steps must be taken to eliminate all crime. C. crime should be reduced to the level at which the marginal cost from crime equals the marginal cost of crime prevention. D. crime should be reduced to the level at which the total benefit from crime equals the total cost of crime prevention.
The consumer faces a budget constraint because the market price of X is $3, the market price of Y is $3, and the consumer's budget is $90. In order for this consumer to choose the corner solution at point E, which of the following must occur?
A. price of Y must rise to $6. B. price of X must rise to $6. C. price of Y must rise to $9. D. price of X must rise to $9.
Which one of the following statements is incorrect?
A. Policy activists believe in the use of fiscal and monetary policies to combat inflation and unemployment. B. Monetarists are policy activists. C. Keynesians are policy activists. D. New classical economists are non-interventionists.