Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher
Answer: B
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Gene's Car Wash is a natural monopoly. To wash 100 cars a week, if Gene is unregulated, he would charge a price of $10. Gene's long-run average cost for washing 100 cars is $8, his average variable cost is $6, and his marginal cost is constant at $4
If Gene was regulated using a marginal cost pricing rule, the price he would be allowed to charge to wash 100 cars is A) $10. B) $8. C) $6. D) $4.
An exclusive supply contract is a contract between a firm and its input suppliers that requires the suppliers to sell only to that firm, not anyone else.
Answer the following statement true (T) or false (F)
The exercise of union power will tend to
A. Cause product prices to be lower in unionized industries. B. Cause profits to be higher in unionized industries. C. Increase the supply of labor available to nonunion industries. D. Reduce the supply of labor available to nonunion industries.
Which of the following are scarce?
A) information B) time for recreation C) clean air D) all of the above