Suppose that at a given level of output, a perfectly competitive firm charges a price of $12 and has average total costs of $10 . If its economic profit is $20,000 . then it must be producing:
a. 40,000 units of output.
b. 20,000 units of output.
c. 30,000 units of output.
d. 10,000 units of output.
e. 50,000 units of output.
d
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Given aggregate demand, a decrease in aggregate supply creates:
a. a higher price level and a higher GDP level. b. a lower price level and a higher GDP level. c. cost-push inflation. d. demand-pull inflation.
Which of the following would move the economy up and to the left along a short run Phillips Curve? a. Sales of government securities by the Fed
b. Increases in taxes by the federal government. c. Reductions in government expenditures on newly produced goods and services. d. None of the above
U.S. residents bear the burden of unemployment equally
a. True b. False
Suppose the price of a Snickers candy bar is $2.00 at both the airport and the grocery store. The price elasticity of demand for a Snickers candy bar at an airport is likely to be ________ the price elasticity of demand for a Snickers candy bar at the grocery store.
A. equal to B. the reciprocal of C. less than D. greater than