Firms need to know the shape of a demand curve to use marginal analysis.
Answer the following statement true (T) or false (F)
False
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Suppose the market clearing price for apples falls from $3.00 to $2.00 per pound, and the overall market clearing output decreases from 1 million to 1/2 million pounds. How can we explain the fall in price and fall in market output?
A) Supply decreased and demand remained unchanged. B) Supply remained unchanged and demand decreased. C) Demand increased and supply remained unchanged. D) Demand remained unchanged and supply increased.
Issuing marketable permits to firms that produce a product with external costs will give the firms the incentive to
A) declare bankruptcy. B) buy and sell the permits amongst themselves. C) escape the problem completely. D) quit producing the output. E) increase the external cost because they no longer need to deal with the externality.
A persistently declining price level resulting from economic growth and unchanged aggregate demand is called
A) demand-side deflation. B) supply-side deflation. C) ozian deflation. D) secular deflation.
Because of the recessions in 1983 and 1991, the structural deficit was far larger than the actual deficit in those years
a. True b. False Indicate whether the statement is true or false