In a store that sells souvenirs, suppose an agent receives a $1 commission for each unit sold, and the principal receives the residual profit. As a result
A) joint profit is maximized.
B) the agent will sell until the principal's marginal cost equals $1.
C) no agent would enter into such a contract.
D) the agent wishes to sell as many units as he can.
D
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
The Miami Dolphins play football in Joe Robbie Stadium which holds 76,500 seats. In 2009, attendance averaged about 70,000 fans per game. This means that the quantity supplied of seats is
A) 76,500. B) 70,000. C) 6,500. D) 126,500.
At a level of output equal to the economy's potential, the simple spending multiplier in the long run equals one
a. True b. False Indicate whether the statement is true or false
Which of the following is not a basic characteristic of monopolistic competition?
A. The use of trademarks and brand names. B. Recognized mutual interdependence. C. Product differentiation. D. A relatively large number of sellers.