Consider an unregulated monopoly in Figure 8.13. Suppose that a second firm enters the market and both firms in the industry are profitable. After the second firm's entry, the industry is now classified as:
A. a natural monopoly.
B. a duopoly.
C. a monopolistic competitor.
D. a pure competitor.
Answer: B
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Prices for industrial commodities such as steel rods or machine tools are
A) heavy prices. B) custom prices. C) auction prices. D) sticky prices.
Lizzie's budget line is shown in the figure above. The relative price of a cookie is ________ per cookie
A) 2 magazines B) 0.5 of a magazine C) $1 D) $2
Figure 32-2
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Suppose that Figure 32-2 shows the effects of reducing the budget deficit by raising taxes. If authorities do not want real GDP to fall, monetary policy must
A. become sufficiently more expansionary to restore the aggregate demand curve to D0D0. B. contract aggregate demand to be consistent with deficit-reducing fiscal policy. C. not lower interest rates and thwart the goal of a balanced budget. D. become more contractionary to lower the interest rate and spur investment.
A rightward shift in the aggregate demand curve is most likely to result in
a. inflation. b. recession. c. economic growth. d. an increase in real GDP.