Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher
B. expansionary; higher; potential
C. recessionary; higher; potential
D. recessionary; lower; lower
Answer: B
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In the above figure, after the second worker is hired, the marginal product of labor is
A) increasing. B) diminishing. C) constant. D) zero.
The best threat is on
a. You always have to carry out b. You must always carry out c. You sometimes have to carry out d. You never have to carry out
Which of the following is an economic cost of unemployment?
a. The extra leisure time available b. The increase in short-run output that results in higher unemployment c. The psychological cost of not having a job d. The cost of having to count the unemployed e. The opportunity cost of lost output
Under which of the following conditions could the monopoly price be less than the price that would result in perfect competition? When there are
a. diminishing marginal returns b. substantial economies of scale c. higher unit costs d. increasing costs e. constant returns to scale