The long-run aggregate supply when resources are fully employed
A) has no relationship with the production possibilities curve.
B) will always be associated with a point outside the production possibilities curve.
C) will always be associated with a point on the production possibilities curve.
D) is determined by demand.
C
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When costs are uncertain, a government might use a _____ contract, where the government pays the cost of the project plus an additional amount
a. fixed fee b. cost plus fixed fee c. cost plus percentage fee d. cost plus incentive fee
Which of the following statements is INCORRECT regarding the model for information products?
A) Average total costs slope downward, because average variable cost is constant, average fixed cost slopes downward. B) The firm maximizes profit by setting the price of its product equal to marginal cost. C) Marginal cost equals average variable cost. D) In the long run, accounting profit is positive.