The following is likely to occur after a ________ shock: [AD? ? Y? ? T? ? deficit? ? G? ? AD? ? Y? ].
A. positive aggregate demand
B. positive aggregate supply
C. negative aggregate demand
D. negative aggregate supply
Answer: C
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Firms in perfectly competitive markets who wish to maximize profits should:
A. keep producing more as long as marginal cost is less than marginal revenue. B. produce where marginal cost and marginal revenue are equal. C. produce less as long as marginal cost is greater than marginal revenue. D. All of these are true.
The firm in the above figure breaks even when quantity is
A. A. B. B. C. C. D. D.
If prices of goods and services quickly adjust to demand shocks, then
A. Firms would find it difficult to produce at their optimal output rates B. Output rates would quickly adjust to changes in demand C. Firms would find it easier to produce at their optimal output rates D. The economy would experience severe short-run fluctuation
Refer to Figure 5-6. What does D2 represent?
A) the demand curve reflecting marginal social benefits B) the positive externalities curve C) the demand curve reflecting marginal private benefits D) the social welfare curve