A perfectly competitive firm charges a price which is greater than its marginal cost

What happens to consumer surplus as price falls along a given demand curve?

a. It always increases. b. It always decreases. c. It never changes. d. It increases only if price increases just a little. e. It depends on the elasticity of demand and supply.

A change in government purchases has the greatest effect on the economy in the short run when _____. a. the aggregate demand curve is relatively flat

b. the aggregate demand curve is relatively steep. c. the short-run aggregate supply curve is relatively flat. d. the aggregate demand curve is vertical. e. the short-run aggregate supply curve is vertical.