In a decreasing-cost industry, the long-run industry supply curve is
a. horizontal
b. vertical
c. upward sloping
d. downward sloping
e. the sum of the individual firm's marginal cost curves
D
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A firm in monopolistic competition that is maximizing profit ________
A. always makes a positive economic profit in the short run B. never needs to shut down because its price always exceeds minimum average variable cost C. might, in the short run, sell at a price that is less than average total cost D. shuts down temporarily if it incurs a loss equal to total variable cost
At a perfectly competitive equilibrium with production and trade, the slope of the production possibility curve will be
A) equal to the slope of the price line faced by the consumers. B) steeper than the slope of the price line faced by consumers. C) flatter than the slope of the price line faced by consumers. D) either steeper or flatter than the price line faced by the consumers, depending upon the relative preferences of the consumers.
The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price.
Figure 17-11
Refer to Figure 17-11. The deadweight loss created by the tariff is represented by the area
a.
B.
b.
D + F.
c.
D + E + F.
d.
B + D + E + F.
Members of Congress are able to influence monetary policy, albeit indirectly, through their ability to
A) withhold appropriations from the Board of Governors. B) withhold appropriations from the Federal Open Market Committee. C) propose legislation that would force the Fed to submit budget requests to Congress, as must other government agencies. D) instruct the General Accounting Office to audit the foreign exchange market functions of the Federal Reserve.