Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.

When the opportunity cost of producing more of a good is increasing, the marginal cost of producing more of the good is

A) decreasing. B) constant. C) increasing. D) More information is needed to answer the question.

Suppose your accountant told you that the $50,000 you made last year was your normal profit. When you asked him what your accounting profit was he replied that it was precisely the same as your normal profit. You wouldn't have to ask what your economic profit was because you know it must be

a. 0 b. $50,000 c. $100,000 d. $50,000 loss e. $100,000 loss