Which of the following occurs when an expansionary gap is closed in the long run by the action of firms?
a. Output decreases, and the price level increases
b. Inflation decreases, and unemployment rises.
c. Both the equilibrium output and the price level increase.
d. Both the equilibrium output and the price level decrease.
e. Inflation rises, and unemployment decreases
a
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In the figure above, if the firm is regulated using a marginal cost pricing rule, the deadweight loss created is equal to the area of
A) ABG. B) BEFG. C) BCFG. D) BCE. E) None of the above because there is no deadweight loss created.
A great deal of damage is done to the environment in the urban U.S. because
A) a system based on private property cannot provide for a common environment. B) few people understand the economics of pollution. C) many and perhaps most people assign little or no value to a pleasant environment. D) the environment is treated as everyone's property and therefore as no one's property. E) the United States has no central planning.