In the short-run macro model, equilibrium occurs when
a. all of the following conditions are satisfied
b. the unintended change in inventories is zero
c. total sales equals output
d. the aggregate expenditure line intersects the 45-degree line
e. GDP equals aggregate expenditure
A
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Under what circumstances will the equilibrium in a trust game be efficient?
What will be an ideal response?
Jamie and Danny both attend the same college and incur the same expenses for tuition, books, and school supplies. Jamie gave up a lucrative modeling job in Paris to attend school full-time and Danny gave up a part-time job as a sales clerk in a department store. It follows that: a. the opportunity cost of attending college is the same for both since they are enrolled at the same academic
institution. b. the opportunity cost of attending college is likely greater for Jamie than for Danny. c. the opportunity cost of attending college is likely greater for Danny than for Jamie. d. the opportunity cost is minimal for both since college graduates are paid much higher than high school graduates on average.
To be a natural monopoly, a firm must
a. control an essential natural resource input. b. be very large. c. have a continuously falling average cost curve as output rises. d. have falling average costs over a substantial range of total market demand.
Determine the range of abatement within which policy achieves positive net benefits.
Suppose that the benefits and costs of water quality policy have been estimated as follows: MSB = 40 – 0.8A MSC = 10 + 0.2A TSB = 40A – 0.4A2 TSC = 10A + 0.1A2, where A is the percentage of pollution abatement and the benefits and costs are measured in thousands of dollars.