"A drop in government expenditures lowered output in the short run, but left output unaffected in the long run." This statement implies that the price level __________ in the long run, causing the interest rate to __________

Suppose that the interest rate paid to savers increases. As a result, Tom wishes to save less. This suggests that, for Tom,

A) the substitution effect is greater than the income effect. B) the income effect is greater than the substitution effect. C) utility maximization is not occurring. D) future consumption is a luxury.

A monopolist is able to maximize its profits by: a. setting the price at the level that maximizes its per-unit profit

b. producing output where marginal revenue equals marginal cost and charging a price along the demand curve. c. producing output where marginal revenue equals marginal cost and setting price at the demand curve's highest point. d. producing output where price is equal to its marginal cost.