In drawing a production possibilities curve, it is assumed that:
A) technology does not change.
B) the economy is fully employed and may not be efficient.
C) there are increasing qualities of the factors of production.
D) all of the above are true.
Ans: A) technology does not change.
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If demand pull inflation occurs when the economy is already at potential GDP, then following the initial increase in aggregate demand, the
A) AS curve shifts rightward. B) potential GDP line shifts rightward. C) AS curve shifts leftward. D) potential GDP line shifts leftward. E) None of the above is correct because demand-pull inflation shifts only the aggregate demand curve.
If price is cut and demand is inelastic, then
A) total revenue will fall. B) total revenue will not change. C) quantity demanded will fall D) total revenue will rise.
Consumer's surplus can be written as
a. total expenditure ? total utility. b. total utility ? total expenditure. c. marginal utility ? marginal expenditure. d. marginal expenditure ? marginal utility.
A group of firms working together and acting as a supplier of a product is called a cartel. A group of employees working together and acting as a single supplier of labor is called a