Figure 6.5 shows the short-run and long-run effects of an increase in demand of an industry. The market is in equilibrium at point A, where 100 identical firms produce 6 units of a product per hour. If the market demand curve shifts to the right, what will happen to the number of firms in the industry as the industry moves from point A to point B?
A. It increases.
B. It decreases.
C. It remains the same.
D. either A or B or C
Answer: C
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If the value of a price index was 125 for 2005 and 75 for 1982, and GDP was 2500 in 2005 compared to 600 in 1982, the value of real 2005 GDP in terms of 1982 prices is
a. 1500. b. 1000. c. 2500. d. 360.
The economic way of thinking suggests that if the government imposed a $500 tax on owners of red automobiles,
a. fewer red automobiles would be produced and sold. b. more red automobiles would be produced and sold. c. there would be no change in the number of red automobiles produced and sold. d. red automobiles would cease to exist.
Explicit agreements between businesses to keep prices high:
A. are illegal. B. are not in the public's best interests. C. are called collusion. D. All of these statements are true.
An externality exists when the cost or benefit resulting from some activity or transaction is experienced by parties external to the activity or transaction.
Answer the following statement true (T) or false (F)