Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A
B. Falling; A; C
C. Falling; B: C
D. Rising; A; C
Answer: B
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Three hundred paper mills compete in the paper market. The total cost of production (in dollars) for each mill is given by the formula TC = 1,000Qmill + (Qmill)2, where Qmill indicates the mills annual production in thousands of tons. The marginal external cost of a mill's production (in dollars) is given by the formula MEC = 200 + 2Qmill. Finally, annual market demand (in thousands of tons) is given by the formula Qd = 200,000 - 100P. What is the efficient quantity?
A. 34,286 B. 131,429 C. 1,200 D. 90,000
A financial asset is considered a security if
A) the owner of the security receives dividends and realizes a capital gain when the asset is sold. B) its value increases after it is sold in a primary market. C) it can be sold in a secondary market. D) its value is secure; that is, the owner will not suffer a financial loss when the asset is sold.
If governments promise to bail out the financial system in the event of a crisis, this creates a moral hazard problem. Describe this problem
What will be an ideal response?
If all we know is that the opportunity cost of a car equals 100 refrigerators in France, and 200 refrigerators in Italy, we can conclude
a. nothing about which nation has the absolute advantage in refrigerator production b. that France has a comparative advantage in refrigerator production c. that mutually beneficial international trade might involve the market exchange of 1 car for 80 refrigerators (whereby France would gain more than Italy) d. that mutually beneficial international trade might involve the market exchange of 1 car for 300 refrigerators (whereby Italy would gain more than France) e. that France has the absolute advantage in car production