Suppose that firms are located in a circle on an island. You are given transportation costs, fixed costs, variable costs, and demand (assume that customers are spread evenly along the circle). As the number of customers increase,
A. the number of firms will rise in the long run.
B. the number of firms will stay the same in the long run.
C. the number of firms will fall in the long run.
D. It is impossible to tell from the information given
Answer: A
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When the multiplier is ________, an autonomous decrease in investment of $200 billion decreases equilibrium real GDP by $400 billion
When the multiplier is ________, an autonomous decrease in investment of $200 billion decreases equilibrium real GDP by $800 billion. A) 2.0; 4.0 B) 0.4; 0.2 C) 0.2; 0.4 D) 4.0; 8.0 E) $400 billion; $800 billion
According to the interest-rate-based perspective on the monetary policy transmission mechanism
A) changes in the money supply have little influence on macroeconomic variables. B) key channels of monetary policy indirectly ultimately relate money supply changes to total planned spending through indirect effects on planned investment. C) inflation is always caused by excessive monetary growth and changes in the money supply offset aggregate demand only directly. D) monetary policy leads to increases in the price level but will have no effect on the rate of output.
What was the most fundamental relationship among most Native American tribes, including the Iroquois?
a. Mother-daughter. b. Husband-wife. c. Father-son. d. Chief-warrior.
Shortages occur when
a. many people are unemployed. b. interest rates go up. c. people have trouble supplying the goods and services at current prices. d. the United States imports more than it exports.