Under the assumption of rational expectations, government fiscal and monetary policy changes are effective in the short run
A) all of the time.
B) only when the short-run aggregate supply curve is the same as the long-run aggregate supply curve.
C) only when the policy changes leave the position of the aggregate demand curve unaffected.
D) only when the policy changes are unanticipated.
D
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If marginal benefit is equal to marginal cost, then the
A) producer surplus is equal to the consumer surplus. B) sum of producer surplus and consumer surplus is as large as possible. C) sum of producer surplus and consumer surplus equals zero. D) market has squeezed out total surplus so that it equals zero. E) deadweight loss is more than zero but less than its maximum.
If one adopts a pure free-market approach to depletable resources, then one can expect the price of resources to
A. rise steadily. B. fall steadily. C. fluctuate in a random-walk fashion. D. remain unchanged.
One Guy's Pizza advertising expenditures are $1,200 and sales are $30,000. When the advertising expenditure increases to $1,400, pizza sales increase to $32,000. The arc advertising elasticity of demand is approximately ________
A) 0 B) 0.1 C) 0.4 D) 2.5 E) 12.5
If the supply curve is a vertical line, it means that:
A. regardless of price, the quantity supplied is a constant amount. B. regardless of quantity, the price is a constant amount. C. the good is inferior. D. the good has many substitutes.