When the change in unplanned inventories is positive, then
A) planned inventories will increase in order to return to equilibrium.
B) real GDP is less than aggregate planned expenditure.
C) real GDP equals aggregate planned expenditure.
D) real GDP is larger than aggregate planned expenditure.
E) economic growth will occur as the economy returns to equilibrium.
D
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Why does the production possibilities frontier have a bowed out shape rather than being a straight line?
What will be an ideal response?
In an oligopoly market with a dominant firm and a competitive fringe, if market demand is _____, the market price will be low and the _____ profit will be small
a. less elastic; fringe's b. less elastic; dominant firm's c. more elastic; fringe's d. more elastic; dominant firm's
In contrast with perfect competition, excess capacity characterizes monopolistic competition. Excess capacity is due to which of the following?
A) Monopolistically competitive firms face downward-sloping demand curves. In the long run, firms produce where their demand curves are tangent to their long-run average total cost curves.
B) Monopolistically competitive firms produce at the minimum point on their average total cost curves.
C) Monopolistically competitive markets have low barriers to entry.
D) Monopolistically competitive firms produce where marginal revenue is equal to marginal cost.
An increased gas tax would result in ______.
a. more congestion on the road b. fewer vehicles on the road c. increased negative externalities d. more miles driven