Assuming an upward-sloping aggregate supply curve, when aggregate demand decreases, unemployment
A. Increases, and the price level decreases.
B. Increases, and the price level increases.
C. Decreases, and the price level decreases.
D. Decreases, and the price level increases.
Answer: A
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Refer to Figure 13-14. It is possible to lower the average cost of production by expanding output beyond Q0 to Q1. Why wouldn't a firm expand its output to Q1?
A) Demand is not sufficient for consumers to buy Q1. B) The firm wants to maximize accounting profit rather than economic profit. C) The firm would suffer an economic loss at Q1 while it would break even at Q0. D) The firm's marginal revenue would be negative at Q1.
The tradeoff between equity and efficiency is evident in debates over
a. how progressive our tax code should be. b. how generous our government spending programs should be. c. the debate over international trade policy. d. the debate over labor unions. e. all of the above.
Which of the following best defines supply?
a. the amount of a good that producers want to sell at a particular price b. the amount of a good that consumers will buy c. the amount of a good that producers are willing and able to sell at each possible price, other things constant d. the amount of a good that producers are willing to sell at each possible price, other things constant e. the amount of a good that producers are willing and able to buy at each possible price, other things constant
Which of the following is always wrong, regardless of what other information may be given to you?
a. Hiring a worker when her marginal physical product is decreasing. b. Hiring a worker when her marginal physical product is positive. c. Hiring a worker when her marginal physical product is increasing. d. Hiring a worker when her marginal physical product is negative. e. Hiring a worker when her MRP > W.