Refer to the graph below. All data are for the short run. Which of the following statements is correct?
A. Production is profitable only when price is above P3
B. Average fixed cost is P1 P3 at output Q1
C. The firm will produce an output of Q1 when price is P1
D. At price P1, the firm will close down
D. At price P1, the firm will close down
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Under the Social Security program currently in existence
A) benefits are based on need. B) benefits are determined by whether or not one contributed to the system. C) benefits are provided to everyone who contributed to the system EXCEPT those under private retirement programs that provide an annual income in excess of $13,500. D) benefits are guaranteed to be no lower for future retirees than for current retirees.
Demand-pull inflation:
A. occurs when prices of resources rise, pushing up costs and the price level. B. occurs when total spending exceeds the economy's ability to provide output at the existing price level. C. occurs only when the economy has reached its absolute production capacity. D. is also called cost-push inflation.