Suppose a competitive industry produces output, Q, using some input, i, where the price of the output is PQ and the input price is Pi. Efficient use of resources requires that

Consider the following three statements:

i. You can either stand during a college football game or you can sit. You believe that you will see the game very well if you stand and others sit but that you will not be able to see at all if you sit and others stand. You therefore decide to stand. ii. Your friend tells you that he expects many people to stand at football games. iii. An economist studies photos of many college football games and estimates that 75 percent of all fans stand and 25 percent sit. Which of these statements deals with optimization, which deals with equilibrium, and which deals with empiricism? Explain.

Under a fixed exchange rate system, an expansionary fiscal policy such as an increase in government expenditures will lead to a(n) ________ in real GDP and a ________ inflation rate

A) increase; higher B) increase; lower C) decrease; higher D) decrease; lower