Fiscal policy is likely to fail to correct stagflation in an economy because:
a. it affects both aggregate demand and supply, although only aggregate supply needs to be changed
b. it affects both the aggregate demand and supply, although only aggregate demand needs to be changed.
c. it affects aggregate demand only, although aggregate supply needs to changed.
d. it affects aggregate supply only, although only aggregate demand needs to be changed.
e. it affects either aggregate demand or aggregate supply, although both need to be changed simultaneously.
c
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Refer to Figure 4-15. The price buyers pay after the tax is
A) $7. B) $20. C) $22. D) $27.
Producer surplus is the cost of production minus the amount a seller is paid
a. True b. False Indicate whether the statement is true or false
Economic profits are competed away in the long run for a monopolistic competitor because of the absence of significant _______________________.
Fill in the blank(s) with the appropriate word(s).
The cost-minimizing rule is that a firm should utilize inputs such that the marginal product of an input divided by the price of the input is the same for all inputs. This is also the profit-maximizing rule because
A. they are exactly the same. B. we obtain the profit-maximizing rule by multiplying each ratio by the product price, which is the same for each input. C. we obtain the profit-maximizing rule by multiplying each ratio by the marginal revenue produced. D. the profit-maximizing rule is just the inverse of the cost-minimizing rule.