If aggregate demand decreases and neither short-run nor long-run aggregate supply changes, then
A) the price level increases in the short-run and decreases in the long run.
B) there is an inflationary gap.
C) there is a recessionary gap.
D) in the long run, the long-run aggregate supply will decrease.
C
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Free trade will affect a country's employment in different industries
Indicate whether the statement is true or false
Suppose a farmer in a perfectly competitive agricultural industry rents land that is uniquely productive in the production of a certain crop. In the long run
A) the owner of the land receives economic rent while the farmer earns zero economic profit. B) the owner of the land earns zero economic profit while the farmer receives economic rent. C) both the farmer and the owner of the land receive economic rent. D) neither the farmer nor the owner of the land receive economic rent.
What did Harvard economist Edward Chamberlain say about the observation that a monopolistically competitive firm's average cost of production exceeds its minimum average total cost?
A) Chamberlain argued that these higher costs represent the wastefulness of this market structure. B) Chamberlain argued that this belief is incorrect. In his view, monopolistically competitive firms do not produce at a cost above their minimum average total costs. C) According to Chamberlain, this cost difference represents the value consumers place on variety and having more choice. D) In Chamberlain's view, this is evidence that monopolistic competition uses society's resources inefficiently and in a fashion that merits government intervention.
If Wisconsin cheddar cheese sells for $3.00 per pound in the United States and for 27.90 pesos in Mexico, what is the exchange rate between the dollar and the peso (assuming PPP holds)?
a. $1 = 2.79 pesos b. $1 = 7.90 pesos c. $1 = 9.30 pesos d. $1 = 27.90 pesos