Which of the following does not describe a characteristic of short-term economic fluctuations?
A. The unemployment rate rises during recessions.
B. Expansions and recessions are felt throughout the economy.
C. Durable-goods industries are less sensitive to short-term fluctuations than service and non-durable industries.
D. Expansions and recessions are irregular in length and severity.
Answer: C
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Figure 4.3 illustrates the demand for tacos. A successful advertising campaign to sell tacos would bring about a movement from
A) point a to point b. B) point c to point b. C) D2 to D1. D) D0 to D1.
Which of the following is ALWAYS true regarding a profit maximizing monopolistically competitive firm in short-run equilibrium?
A) P = ATC. B) P = MR. C) MR = MC. D) MC = ATC.
The use of a two-part price in a regulated natural monopoly
A) maximizes the deadweight loss. B) allows the firm to maximize profits. C) may make it possible for the firm to obey a marginal cost pricing rule and not go out of business. D) All of the above answers are correct.
Refer to Figure 13-3. Suppose the economy is at point C. If investment spending decreases in the economy, where will the eventual long-run equilibrium be?
A) A B) B C) C D) D