In the long-run equilibrium, a monopolistically competitive firm earning normal profit produces the allocatively efficient output level
Indicate whether the statement is true or false
FALSE
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The interest rate effect suggests that
A) an increase in the price level decreases the interest rate, which causes businesses and consumers to reduce desired spending. B) an increase in the price level increases the interest rate, which causes businesses and consumers to reduce desired spending. C) an increase in the price level increases the money supply, which causes businesses and consumers to increase desired spending. D) a decrease in the price level decreases the interest rate, which causes businesses and consumers to reduce desired spending.
What is job rationing and how does it relate to unemployment? What factors can lead to job rationing? Briefly explain these factors
What will be an ideal response?
If the short run elasticity of demand for widgets is 1.1 and the long run elasticity of demand for widgets is 3.6, an increase in price will ____ total revenue in the short run and ____ total revenue in the long run. a. Increase; increase
b. Increase; decrease. c. Decrease; increase. d. Decrease; decrease.
A small country is considering imposing a tariff on imported wine at the rate of $5 per bottle. Economists have estimated the following based on this tariff amount: World price of wine (free trade):$20 per bottleDomestic production (free trade):500,000 bottlesDomestic production (after tariff):600,000 bottlesDomestic consumption (free trade):750,000 bottlesDomestic consumption (after tariff):650,000 bottles Before the tariff is imposed, the country imports ________ bottles of wine, but following the imposition of the tariff, the country will import ________ bottles of wine.
A. 750,000; 650,000 B. 150,000; 50,000 C. 100,000; 100,000 D. 250,000; 50,000