In a monopoly
A. the monopolist determines how much each firm will produce.
B. the market is small in an absolute sense.
C. the firm and the industry are the same thing.
D. the firm is large in an absolute sense.
Answer: C
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The AD-AS model implies that, in the long run,
a. the economy adjusts very quickly to demand shocks b. changes in government spending have no effect on GDP c. the price level never changes d. a mixture of fiscal and monetary policy is necessary to achieve full employment e. the Fed controls output
When money wages rise, the most significant effect on the aggregate supply curve is that it
a. shifts outward. b. shifts inward. c. becomes flatter. d. becomes steeper.
Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 5, Q = 125) and (L = 6, Q = 152). Then the marginal product of the 6th worker is
a. 25 units of output. b. 27 units of output. c. 37 units of output. d. 162 units of output.
The aggregate-demand curve shows the quantity of goods and services that firms choose to produce and sell at each price level.
a. true b. false