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
Answer: B
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A quintile is a group that contains
A) exactly 5 people. B) exactly one-fifth of the population. C) five identical siblings. D) five musicians or singers.
The substitution effect of a decrease in the price of movie tickets results in
A) a decrease in the quantity of movie tickets demanded. B) an increase in the demand for movie tickets. C) an increase in the quantity of movie tickets demanded. D) a decrease in the demand for movie tickets.
Which of the following is false?
A. Profit is maximized when MR = MC for both monopolies and perfect competition firms B. Both monopolies and perfect competition firms earn zero profit in the long run C. At equilibrium, price is higher than marginal cost for monopolies but not for competitive firms D. Monopolies profit maximize and perfect competitive firms output maximize
Luis has a factory that he wants to use to make tractors, but the government makes him produce hospital beds. He would like to make 1,000 beds per day, but he is allowed to make only 500 beds. Which of the following countries does Luis most likely live in?
a. Cuba b. France c. Germany d. Australia