Those who favor active policy making argue that all of the following exist EXCEPT
A) perfectly flexible wages and prices.
B) inflation and unemployment are stable in the short run and predictable in the long run.
C) pure competition is not typical.
D) aggregate demand shocks can influence real GDP and unemployment.
A
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Refer to Table 4-1. The table above lists the highest prices three consumers, Curly, Moe, and Larry, are willing to pay for a bottle of champagne. If the price of the champagne falls from $24 to $14
A) Larry and Moe will receive more consumer surplus than Curly. B) Curly will buy four bottles; Moe will buy two bottles, and Larry will buy one bottle. C) consumer surplus increases from $32 to $53. D) consumer surplus will increase from $80 to $95.
If total variable cost exceeds total revenue at all output levels, a perfectly competitive firm
A) has covered its fixed cost. B) should produce in the short run. C) should shut down in the short run. D) is making short-run profits.