In the figure above, what happens to total revenue as we move from point A to point B?
A) It increases.
B) It decreases.
C) It remains constant.
D) It becomes negative.
E) More information about the elasticity of demand is needed to determine if it increases, decreases, or does not change.
B
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Looking at the globalized AS/AD model, the economy can exceed potential output, without generating accelerating goods inflation, because:
A. the domestic price level always exceeds the world price level. B. the world price level always exceeds the domestic price level. C. the world price level puts a cap on the domestic price level. D. the LRAS curve is no longer vertical.
Refer to the graph shown. The output range in region c is associated with:
A. constant returns to scale. B. diminishing marginal productivity. C. economies of scale. D. diseconomies of scale.