Positive economic analysis
a. involves the study of firms with positive profits.
b. involves how resources are actually used in an economy.
c. involves judgments on how resources should be used in an economy.
d. is usually thought to be a waste of time.
b
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Graphically an increase in the short-run aggregate supply line represents a(n) ________, and a shift leftward of the long-run aggregate supply line represents a(n) ________.
A. adverse inflation shock; shock to potential output B. favorable inflation shock; shock to potential output C. shock to potential output; favorable inflation shock D. shock to potential output; adverse inflation shock
If the actual money multiplier equals the potential money multiplier and if the Federal Reserve wishes to increase the money supply by $500 when the reserve ratio is 10 percent, it should
A) buy $5000 of government bonds. B) sell $5000 of government bonds. C) sell $50 of government bonds. D) buy $50 of government bonds.
Given the market demand and cost data in the above figure, the existence of two firms equal sized firms producing a total of 8 million cubic feet of natural gas means that the long-run average cost of producing natural gas is
A) 10 cents per cubic foot. B) 20 cents per cubic foot. C) 30 cents per cubic foot. D) 40 cents per cubic foot.
What is the marginal product of labor?
What will be an ideal response?