In a decreasing-cost industry:
A. there will be no firm entry because the increased supply will reduce the long-run
equilibrium price.
B. the law of demand does not apply.
C. greater demand leads to higher long-run equilibrium prices.
D. lower demand leads to higher long-run equilibrium prices.
Answer: D
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What is discretionary fiscal policy and what is its purpose?
What will be an ideal response?
Refer to Figure 2-2. Suppose Mendonca is currently producing 60 pounds of vegetables per period. How much meat is it also producing, assuming that resources are fully utilized?
A) 45 pounds of meat B) 75 pounds of meat C) 80 pounds of meat D) 100 pounds of meat
Why are losses acceptable in the short run but not the long run?
What will be an ideal response?
Simple measures such as ________________ can help overcome the problem of using up common resources.
a. laws regulating or banning usage b. cap-and-trade emissions regulations c. private property d. explaining the tragedy of the commons