The misperceptions theory of short-run aggregate supply curve says that quantity of output will decrease if the price level
a. decreases by more than expected so that firms believe the relative price of their output has decreased.
b. decreases by more than expected so that firms believe the relative price of their output has increased.
c. decreases by less than expected so that firms believe the relative price of their output has decreased.
d. decreases by less than expected so that firms believe the relative price of their output has increased.
a
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Refer to Figure 15-18 to answer the following questions
a. What quantity will this monopoly produce and what price will it charge? b. Suppose the government decides to regulate this monopoly and imposes a price ceiling of $25. Now what quantity will the monopoly produce and what price will it charge? c. Will every consumer who is willing to pay the ceiling price of $25 be able to buy the product? Briefly explain.
Which of the following statements about two-part tariffs is false?
A) Because each individual has a different individual demand curve, if there is just one entrance fee some consumers will be able to reap some consumer surplus. B) The producer cannot capture the entire consumer surplus because the entrance fee might discourage some potential consumers even though they would have been willing to pay a lesser entrance fee. C) For two-part tariff pricing to be successful, the producer must be able to identify two distinct customer groups. D) Two-part tariff pricing allows a producer to capture the entire consumer surplus.
Serious environmental problems are
A. unique to industrial economies. B. unique to Western economies. C. unique to civilized economies (i.e., those in which people live mainly in cities). D. experienced by centrally planned and market-based economic systems.
Which of the following is a difference between the Keynesian and classical models?
a. Price stickiness is considered in the Keynesian model but not in the classical model. b. Input prices are completely flexible in the Keynesian model but are inflexible in the classical model. c. The overall price level can change in the Keynesian model but not in the classical model. d. Input prices adjust quickly to economic changes in the Keynesian model but not in the classical model.