Refer to the above graph. In the short run, this monopolistically competitive firm will set price at:
A. $55 and produce 45 units of output
B. $65 and produce 35 units of output
C. $50 and produce 35 units of output
D. $52 and produce 50 units of output
Answer: B. $65 and produce 35 units of output
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The short-run Phillips curve is downward sloping because
A) the expected inflation rate is zero in the short run. B) the economy always returns to full employment. C) reducing the unemployment rate will reduce the inflation rate in the short run. D) in the long run, the expected inflation rate equals the actual inflation rate. E) the unemployment rate can be above or below the natural unemployment rate.
For a natural monopoly, economies of scale
A) exist along the long-run average cost curve at least until it crosses the market demand curve. B) and diseconomies of scale exist along the long-run average cost curve at least until it crosses the market demand curve. C) lead to a legal barrier to entry. D) as well as constant returns to scale and diseconomies of scale exist along the long-run average cost curve at least until it crosses the market demand curve. E) are totally absent.
Fiscal and monetary policy are conducted by _____ people to attain ______ goals.
A. the same; the same B. different; different C. the same; different D. different; the same
Voluntary export restraints (VER):
A. have the same effect as an import ban. B. are illegal under the international trading rules. C. violate the spirit of international trade agreements. D. All of these