If an industry is made up of five identical-sized firms, the four-firm concentration ratio is
A) 5%.
B) 20%.
C) 80%.
D) 100%.
Answer: C
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The economy is at full employment and then aggregate demand increases. Describe what happens as an immediate result of the increase in aggregate demand. Describe how the economy adjusts back to full employment
What will be an ideal response?
Recently, the State of Tennessee discovered chemical compounds in their drinking water which may cause cancer. Since Tennessee's drinking water comes from the Pigeon River in North Carolina, the source of these chemicals is the waste discharges of industrial paper plants in North Carolina. This is an example of a(n):
a. external cost imposed on the citizens of Tennessee by the industrial plants of North Carolina. b. market failure where the market price of the output of these industrial plants does not fully reflect the social cost of producing these goods. c. externality where the marginal social costs of producing these industrial goods differ from the marginal private costs. d. all of these.
Which of the following has tended to increase the competitiveness of markets in the United States during the last couple of decades?
a. increases in transport costs b. development of the Internet c. decreased competition from imports d. more government regulation of product quality
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.