Costs that tend to deter firms from changing their prices in response to changes in the market equilibrium price are referred to as
A) large menu costs.
B) small menu costs.
C) real menu costs.
D) burden costs.
B
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The figure above shows the market for annual influenza immunizations the United States. If there is NO external benefit from health care and the government does not intervene in the market, then the equilibrium price of immunizations is
A) $30. B) $20. C) $40. D) $60. E) $70.
In the real business cycle model, output and employment are
a. determined by real supply-side variables. b. determined by supply and demand factors. c. always at their natural rates. d. both a and c. e. None of the above
A zero economic profit is not a bad thing because:
a. it is a situation in which the owners, or shareholders, of a firm could not do better elsewhere. b. it is a situation in which the resources of a firm are always optimally utilized. c. it means that a firm is paying an interest rate that is below the market rate. d. it means that stock prices will not fall. e. it means that investors are better off in the current venture than they would be in any other investment.
If the demand for a product increases, then we would expect equilibrium price
a. to increase and equilibrium quantity to decrease. b. to decrease and equilibrium quantity to increase. c. and equilibrium quantity both to increase. d. and equilibrium quantity both to decrease.