According to rational expectations, if policy makers consistently stimulate aggregate demand when real output falls below the economy's potential output, then people will not be able to anticipate the effects of this policy on the price level, unemployment, and the real output level

Consider the demand curve of the form Q = a - bP. If a is a positive real number, and b = 0, then demand is

A) completely inelastic. B) inelastic, but not completely. C) unit elastic. D) elastic, but not infinitely.

Refer to the given data. Assuming the prices of resources a and b are $5 and $8 respectively, when the firm hires the profit-maximizing combination of resources, its economic profit will be:

Answer the question on the basis of the following marginal product data for resources a and b. The output of these independent resources sells in a purely competitive market at $1 per unit.
A.  $170.
B.  $76.
C.  $145.
D.  $138.