The multiplier effect refers to the fact that a change in spending (aggregate demand) will
a. increase the money supply.
b. cause prices to rise by some multiple of the initial increase in spending.
c. cause nominal output to rise by some multiple of the initial increase in spending.
d. reduce prices by some multiple of the increase in spending.
C
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Larger increases in the demand for labor than in the supply of labor explain:
A. the slowdown in real wage growth. B. skill-biased technological change. C. the substantial increase in real wages. D. increasing wage inequality.
If market price is greater than or equal to the minimum of AVC but below the minimum of AC, then
A) the firm will shut down. B) the firm will operate because its loss is less than if it shut down. C) revenue is lower than variable costs. D) profit is positive and so the firm will operate.
The practice of charging customers different prices for the same good is called:
A. price marking. B. customer discrimination. C. group discounting. D. price discrimination.
In the above figure, if this natural monopolist were unregulated, the profit maximizing firm would produce
A. past the Q3 output rate. B. at Q3 output rate. C. at Q2 output rate. D. at Q1 output rate.