Refer to the graph below, showing the long-run supply and demand curves in a purely competitive market. The curves suggest that this industry is:
A. A constant-cost industry
B. Increasing-cost industry
C. Decreasing-cost industry
D. Not possible, because the supply curve always slopes up
A. A constant-cost industry
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The U.S. economy remains subject to frequent boom and bust cycles. Throughout U.S. history, policymakers after the Great Depression often
(a) raise or lower taxes and spending to adjust aggregate demand and thereby smooth the business cycle. (b) take a hands-off approach to the business cycle. (c) consult with world organizations on how to address cyclic fluctuations. (d) close economies to international trade.
Which of the following would cause a movement along the supply curve for cupcakes?
a. an improvement in technology for commercial mixers b. a decrease in the price of cupcakes c. an increase in the price of cake flour d. All of the above are correct.
The main policy tool for manipulating consumer spending is
A. personal income tax. B. corporate income tax. C. capital gains tax. D. None of the above is correct.
The law of diminishing marginal utility states that:
A. total utility is maximized when consumers obtain the same amount of utility per unit of each product consumed. B. beyond some point, additional units of a product will yield less and less extra satisfaction to a consumer. C. price must be lowered to induce firms to supply more of a product. D. it will take larger and larger amounts of resources beyond some point to produce