On the graph, label the shutdown and break-even points.
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When a tax is imposed on a good, at the after-tax equilibrium the marginal benefit of the last unit produced ________ the marginal cost
A) equals B) is greater than C) is less than D) can be calculated but is not comparable to E) The premise of the question is incorrect because after a tax is imposed, it becomes impossible to determine the marginal benefit and the marginal cost.
If firms' expectations about the future become pessimistic so that they think future profits will be lower, then
A) aggregate demand decreases and the AD curve shifts leftward. B) aggregate demand increases and the AD curve shifts rightward. C) the quantity of real GDP demanded decreases, and there is a movement up along the AD curve. D) the quantity of real GDP demanded increases, and there is a movement down along the AD curve. E) the aggregate demand curve does not shift, but potential GDP decreases.
In the basic closed-economy ISLM model, the IS curve can be described by an equation where
A) output is a function of consumption. B) money is a function of interest rates. C) output is a function of money. D) output is a function of interest rates.
User-feedback scores on eBay are an example of:
A. screening. B. statistical discrimination. C. building a reputation. D. None of these statements is true.