Recall the Application about craft beer and the increase in the price of hops to answer the following question(s).The reason why the demand for hops increased is because hops are inputs to the production of beer, and beer demand was rising.
Answer the following statement true (T) or false (F)
False
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The short-run supply curve for a perfectly competitive firm is its
A) marginal cost curve above the horizontal axis. B) marginal cost curve above its shutdown point. C) average cost curve above the horizontal axis. D) average cost curve above its shutdown point.
Refer to the above table. The price of B decreases from $18 to $15. What is the cross price elasticity of demand between B and A?
A. -1.0 B. -0.73 C. +1.83 D. +1.38
Refer to the data provided in Table 9.1 below to answer the question(s) that follow.
Table 9.1
Refer to Table 9.1. If the market price is $17, then in the short run the firm will
A. operate and expand. B. operate but not expand. C. shut down, but not go out of business. D. go out of business.
A $1 increase in government spending on goods and services will have a greater impact on the equilibrium GDP than will a $1 decline in taxes because:
A. government spending is more employment-intensive than is either consumption or investment spending. B. government spending increases the money supply and a tax reduction does not. C. a portion of a tax cut will be saved. D. taxes vary directly with income.