In the 1980s, for the First Time in the Twentieth

question 14

Multiple Choice

In the 1980s, for the first time in the twentieth century

• A) income gaps widened between the richest and the poorest Americans.
• B) middle-class incomes rose.
• C) the poor made economic gains.
• D) the economy was uniformly healthy.
• E) the majority of Americans were middle class.

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Definitions:

Long Run

In economics, a period in which all inputs can be adjusted by firms, and there are no fixed costs, allowing for full industry adjustment.

Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, begins to decrease.

Marginal Cost

The change in total production cost that arises when the quantity produced is incremented by one unit.

Fixed Cost

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and loan payments.