Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium quantity of beef will Question 29 options:
A. stay the same.
B. perhaps increase, decrease, or stay the same, but more information is needed to determine which it does.
C. definitely either stay the same or decrease.
D. decrease.
E. increase.
E. increase.
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Refer to Figure 15-11. Following the entry of Verizon, the subscription price falls from PM to PC. What is the increase in consumer surplus as a result of this change?
A) the area D + F B) the area B + C C) the area A + B + C D) the area B + C + D
Which of the following is not a primary cause of business cycle fluctuations, according to real business cycle theory?
A) A change in the production function B) A change in the size of the labor force C) A change in the money supply D) A change in the real quantity of government purchases
Consider a market with (inverse) demand p = 100 - 2Q. There are two firms in the market with constant marginal and average costs of $10
a. Determine the Cournot equilibrium quantities and price b. What would be the collusive (joint-profit maximizing) price and quantity? c. Derive the deadweight loss from (i) Cournot Dupoly, (ii) Collusion, and (iii) Perfect competition in this market with the two firms.
One consequence of an increase in government spending is that
a. autonomous consumption will increase b. autonomous consumption and investment spending will decrease c. the increase in GDP will equal the size of the amount of spending d. autonomous consumption and investment spending will increase e. investment spending will increase