The substitution effect of a wage decrease examines the effect of the decrease in wage income on a worker's ability to consume goods and services

All of the following are examples of explicit cost a firm might incur except

A) taxes owed to the state government. B) the revenue a firm generates in using its resources. C) the rental value of the warehouse space the company owns and uses for itself. D) the out-of-pocket expense to hire employees.

The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________.  

A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A