Economists in the field of industrial organization study how
a. central banking policies affect financial markets.
b. firms' demand for labor and individuals' supply of labor affect resource markets.
c. firms' decisions about prices and quantities depend on market conditions.
d. externalities and public goods affect the environment.
c
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When the price of a good rises, the resulting change in relative price causes the consumer to reduce his quantity demanded of that good, even when the consumer is income-compensated so that he remains indifferent about the price change. This observation is known as the
a. Giffen good phenomenon. b. law of demand. c. substitution effect. d. income effect.
A decrease in the number of dry cleaners in an area can be represented by a(n)
a. downward movement along the dry cleaning supply curve b. upward movement along the dry cleaning supply curve c. leftward shift in the dry cleaning supply curve d. rightward shift in the dry cleaning supply curve e. vertical dry cleaning supply curve
Empirical research suggests that the steepness of the aggregate supply curve depends on the
a. size of the multiplier. b. interest rate. c. level of wage rate. d. amount of excess capacity in the economy.
Economic stagnation coupled with high inflation is commonly called:
A. stagflation. B. inflationary stagnation. C. stagnatory growth. D. inflagnation.