A competitive market begins in a situation of long-run equilibrium. Then, there is a decrease in demand. Describe the process that eventually leads to a new long-run equilibrium
The decrease in demand results in firms sustaining losses. In response to the losses, some firms exit the market, decreasing short-run supply. Eventually, short-run supply has decreased sufficiently to restore zero profits. At that point the market has reached a new long-run equilibrium.
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Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each.Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Firm X ($/day) $500$514$530$555$585 Cost to Firm Y ($/day) $400$420$445$480 $520Cost to Firm z ($/day) $300$325$360$400 $550Suppose the government requires each firm to reduce pollution to 2 tons of smoke per day, so that total daily smoke emission is 6 tons. The total cost to society of this policy will be ________ per day.
A. $42 B. $59 C. $135 D. $230
Which of the following statements about the Humphrey-Hawkins Act of 1978 is not true?
a. It is based on neo-Keynesian ideas concerning inflation and employment. b. Its central idea can be depicted in a Phillips curve. c. It views 4 percent as an acceptable and reasonable unemployment rate target. d. It views 7 percent as an acceptable and reasonable inflation rate target. e. It is related to ideas associated with the natural rate of unemployment.
The demand for money curve will shift to the left when
a) the interest rate increases b) the price level increases c) aggregate output decreases d) the price of bonds is expected to decrease e) all of the above will shift the money demand curve to the left
An economic variable that moves in the same direction as aggregate economic activity (up in expansions, down in contractions) is called
A. procyclical. B. countercyclical. C. acyclical. D. a leading variable.