A firm has excess capacity if its output is
A) less than the quantity at which marginal cost is minimized.
B) less than the quantity at which economic profit is maximized.
C) less than the quantity at which average total cost is minimized.
D) more than the quantity at which average total cost is minimized.
C
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Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.1 shows how much of each good Jesse and April can paint in one hour. Jesse's opportunity cost of painting one snowboard is painting
A) 1/8 of a kite. B) 1.5 kites. C) 8 kites. D) 12 kites.
In the long run, what effect does a government's deficit spending have on equilibrium real Gross Domestic Product (GDP)?
A) Equilibrium real Gross Domestic Product (GDP) will increase beyond the full-employment level and there will also be an inflationary effect. B) Higher government deficits will not raise equilibrium Gross Domestic Product (GDP) above the full-employment level. C) Deficit spending will decrease the nation's equilibrium real Gross Domestic Product (GDP). D) The government's deficit spending will increase equilibrium real Gross Domestic Product (GDP).