Comparative advantage is determined by the relative levels of autarky prices
Indicate whether the statement is true or false
TRUE
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
In the long run, firms in monopolistic competition become price takers
Indicate whether the statement is true or false
Assume a firm is facing the following situation: At Q = 1,000, P = $10, MC = $10, ATC = $18, and AVC = $16. This firm should shut down and, in so doing, limit its losses to $2,000
Indicate whether the statement is true or false
If a particular labor market were to convert from a competitive market to a monopsony, what effect would we expect on the number of workers hired? What effect would we expect on the wage paid to workers?