Use the figure below to answer the following question.
The figure shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S2?
A. an increase in the price of wheat
B. a decrease in the price of water
C. an increase in the price of water
D. a new tax on wheat production
Answer: B
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A union shop exists when the
a. employer is only permitted to hire union members b. union is the owner of the firm c. union members are not allowed to be hired d. employer can hire nonunion workers, but the workers must join the union within a certain time period e. only stockholders in the firm are also employees
Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher B. higher; potential C. lower; higher D. lower; potential
All else equal, the price elasticity of demand for a good tends to be lower:
A. in the long run. B. if the good has many close substitutes. C. if the good represents a large share of a consumer's budget. D. if the good has few close substitutes.
Suppose the firm or firms in the market for Good A face a downward-sloping demand curve, maximize profit by producing the quantity at which marginal revenue equals marginal cost, set the price higher than the marginal cost, and break even in long run equilibrium. Which one of the following market structures most likely exists for Good A?
A. Perfectly competition. B. Monopoly. C. Monopolistic competition. D. Oligopoly.