Author Question: Consider a tax cut which affects not only consumer disposable income, but also after-tax earnings ... (Read 38 times)

Sportsfan2111

  • Hero Member
  • *****
  • Posts: 585
Consider a tax cut which affects not only consumer disposable income, but also after-tax earnings from labor supplied to labor markets and from financial assets acquired through saving. In the long run we would expect this tax cut to
 
  A) increase both the price level and the level of real GDP.
  B) decrease both the price level and increase real GDP.
  C) increase the price level.
  D) increase the level of real GDP.

Question 2

How is a long-run average cost curve different from a short-run average cost curve? How are they related?
 
  What will be an ideal response?



ynlevi

  • Sr. Member
  • ****
  • Posts: 338
Answer to Question 1

D

Answer to Question 2

The short-run average cost curve assumes a given plant size (or some other fixed cost), whereas the long-run average cost curve assumes no fixed scale of plant. The long-run average cost curve is the lower envelope of a series of short-run average cost curves.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The first successful kidney transplant was performed in 1954 and occurred in Boston. A kidney from an identical twin was transplanted into his dying brother's body and was not rejected because it did not appear foreign to his body.

Did you know?

The horizontal fraction bar was introduced by the Arabs.

Did you know?

Human neurons are so small that they require a microscope in order to be seen. However, some neurons can be up to 3 feet long, such as those that extend from the spinal cord to the toes.

Did you know?

The most common treatment options for addiction include psychotherapy, support groups, and individual counseling.

Did you know?

HIV testing reach is still limited. An estimated 40% of people with HIV (more than 14 million) remain undiagnosed and do not know their infection status.

For a complete list of videos, visit our video library