Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C
B. D; B
C. A; B
D. B; C
Answer: B
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Refer to Figure 11-6. In the figure above which letter represents the average total cost curve?
A) A B) B C) C D) D
If price decreases by 10 percent and quantity demanded increases by 30 percent, the price elasticity of demand will be
A) 0.333. B) 3. C) 30. D) 300.
"Walmart is a low wage firm and this indicates that it exploits its workers" which of the following should cause one to question the validity of this statement?
What will be an ideal response?
The key characteristics of a monopolistically competitive market structure include
A) many small (relative to the total market) sellers acting independently.
B) barriers to entry are strong.
C) all sellers sell a homogeneous product.
D) sellers have no incentive to advertise their products.