Aggregate demand will shift outward when there is/are
a. a decrease in government spending
b. a decrease in incomes abroad
c. a tax increase
d. consumers deciding to buy more goods and services, even if prices remain unchanged
e. the expectation that future income will fall
D
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Widgets R Us, which is a price-taking firm, is currently producing 250 units of output. The market price is $3 per unit, the marginal cost of the 250th unit is $2.75, average total cost is $3.50 per unit, and average variable cost is $2.50 per unit
What advice should you give Widgets R Us? A) Increase output to reduce losses. B) Continue to produce 250 units in the short run. C) Shut down to minimize losses. D) Decrease output to 200 units.
Creative destruction includes all of the following except
(a) The rise of the automobile industry at the expense of the carriage industry (b) The rise of the computer industry at the expense of the typewriter industry (c) The destruction of all capital during economic busts (d) There is no except; all of the above are examples of creative destruction