Refer to the diagrams, in which AD 1 and AS 1 are the "before" curves and AD 2 and AS 2 are the "after" curves. Other things equal, inflation is absent in:
A. panel (A) only.
B. panel (B) only.
C. panel (C) only.
D. panels (A) and (C).
D. panels (A) and (C).
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The demand for a good is more elastic if the
A) good is a necessity. B) good has few substitutes. C) good is narrowly defined. D) supply of the good is plentiful. E) Both answers B and C are correct.
Cartel members have an incentive to cheat on the cartel because:
a. the cartel does not maximize profits. b. the cartel price is the competitive price. c. each member's output quota is too high. d. each member's MR is not equal to the cartel's MC. e. the industry profit would be higher under competitive conditions.
If the government raised land taxes $20/acre, this would increase the farmer's average fixed cost. How would that affect (a profit maximizing) farmers' decision about the quantity of corn to produce in the short run?
a. It would have little change because in the short run the farmer will consider only the Average Variable Cost (AVC) in making a decision on quantity supplied b. It will decrease the quantity the farmer is willing to supply because the Average Variable Cost (AVC) will increase for the farmer c. It will decrease the quantity the farmer is willing to supply because the farmer considers all costs in the short run in making a decision about quantity supplied d. None of the above
Refer to the given data. The firm is hiring labor:
Use the labor demand data on the left and the labor supply data on the right in answering the following question:
A. at a wage rate that exceeds labor's MRP.
B. under purely competitive conditions.
C. in an imperfectly competitive market.
D. as a monopsonist.