If a firm is operating at an output that is a little less than the minimum point of its ATC curve, the marginal cost is
A. greater than ATC and rising.
B. greater than ATC and falling.
C. less than ATC and rising.
D. less than ATC and falling.
C. less than ATC and rising.
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The 2008-2009 recession must have been a result of ________ because otherwise the combination of the ________ cannot be explained
A) a decrease in AD and an increase in AS; rise in the price level and the decrease in real GDP B) a decrease in AD and AS; rise in the price level and the decrease in real GDP C) a decrease in AD and AS; decrease in the price level and the decrease in real GDP D) a decrease in AD and an increase in AS; fall in the price level and the decrease in real GDP E) an increase in AD and AS; rise in the price level and the decrease in real GDP
Looking at the supply-side effects on aggregate supply shows that a tax hike on labor income
A) decreases potential GDP. B) weakens the incentive to work. C) increases potential GDP because people work more to pay the higher taxes. D) Both answers A and B are correct. E) None of the above is correct.
The market price of a factor of production that is in fixed supply is determined only by demand
Indicate whether the statement is true or false
Suppose the long-run supply curve for a good is upward-sloping. The upward slope could be explained by
a. increases in production costs resulting from more firms coming into the market. b. a breakdown of the "free entry and exit" feature of competition. c. a breakdown of the "price taking" feature of competition. d. a stable demand curve for the good, that is, a demand curve that never shifts.