Suppose that an increase in population increases demand in New Haven County's perfectly competitive market for auto repair. Which of the following is true in the short run?
a. Auto repair centers may be able to earn economic profit.
b. Normal profits increase.
c. The market supply curve of auto repair services shifts to the left.
d. Either price or output is likely to increase, but it's impossible to say which.
e. After firms have had time to adjust to the new equilibrium, the price of auto repair services will exceed the marginal cost.
A
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U.S. residents come to believe that the dollar will depreciate in the future, that is, the exchange rate in the future will be lower than the current exchange rate. As a result
A) the demand curve for dollars shifts rightward. B) the demand curve for dollars shifts leftward. C) there is a movement upward along the demand curve for dollars. D) None of the above answers are correct.
If unemployment is the major problem in the economy, which of the following would be an appropriate monetary policy response?
a. decrease the required reserve ratio b. decrease the interest rate the Fed pays on bank reserves c. buy government bonds d. all of the above
The Pennsylvania Turnpike is a tolled freeway running through the state of Pennsylvania. Motorists must pay tolls at various points along the Turnpike based on the distance they traveled on the freeway. Suppose that despite the tolls, many motorists in the urban areas use the Turnpike causing traffic to slow during peak times. What type of good would the Turnpike be classified as in this case?
a. private good b. club good c. common resource d. public good
Why would a wage differential due to discrimination in hiring be unlikely to persist in a competitive labor market?
a. There is a cost advantage for firms that do not discriminate. b. Workers who are victims of discrimination will eventually drop out of the labor market. c. Competing firms will hire fewer of the workers who are temporarily victimized by discrimination. d. Discrimination cannot exist in markets.