In economics, what differentiates the short run from the long run?
What will be an ideal response?
In the short run, the firm has a fixed factor that limits its level of production. In the long run, all factors are variable. In the short run firms cannot enter or exit the industry. In the long run, this is no longer true.
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In the market for books, initially there are no taxes on books. Books are normal goods. The government introduces a tax of $4 a book and, at the same time, people's income fall by $4,000 a year
Following these two changes, the equilibrium quantity of books A) decreases. B) increases. C) remains unchanged. D) either increases or decreases. We cannot say which.
The most important policy implication of the Classical growth model is that:
A. budget deficits will stimulate economic growth. B. policies to slow population growth will accelerate economic growth. C. policies to stimulate saving and investment will stimulate economic growth. D. policies to stimulate technological development will stimulate economic growth.
Figure 17-10
Refer to . With the tariff, the domestic price and domestic quantity demanded are
a.
P1 and Q1.
b.
P1 and Q4.
c.
P2 and Q2.
d.
P2 and Q3.
What causes cyclical unemployment?
a. workers searching for suitable jobs and firms looking for suitable workers b. the persistent mismatch of workers’ skills and the requirements of jobs c. short-term cyclical fluctuations in the economy d. short-term seasonal fluctuations in the job market