Marginal cost eventually increases because
A) of the law of diminishing returns.
B) eventually each additional worker produces a successively smaller addition to output.
C) the marginal product of the variable input eventually falls.
D) All of the above answers are correct.
D
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Explain two different ways to determine the profit-maximizing level of output for a firm in a perfectly competitive market
What will be an ideal response?
Which of the following will tend to occur when the interest rate increases?
A) The demand for money curve shifts leftward. B) The demand for money curve shifts rightward. C) There is a rightward movement along the demand for money curve. D) There is a leftward movement along the demand for money curve.
With a negative income tax featuring an $8,000 minimum level of income and a 20% tax rate, a household earning $8,000 dollars would receive a subsidy of:
a. zero b. $1,600 c. $6,400 d. $8,000