If there is a decrease in market demand for a product exchanged in a perfectly competitive industry, it results in an industry contraction that will end when the product price is
A. less than the marginal cost faced by the firms.
B. greater than the marginal cost faced by the firms.
C. equal to the marginal cost faced by the firms.
D. greater than the average cost faced by the firms.
Answer: C
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If one euro nation is experiencing rapid growth and inflation while another is facing sluggish growth and recession:
A. the two countries will disagree about the monetary policy that ought to be employed by the European Central Bank. B. only an appreciation of the euro can help both countries simultaneously. C. the European Central Bank ought to employ a tight monetary policy. D. the European Central Bank ought to employ an easy monetary policy.
The fraction of a change in real disposable income that is spent is referred to as the
A) APC. B) MPC. C) MPS. D) APS.
An increase in the price of a complement shifts the demand curve to the
a. right b. left c. it does not change the demand curve d. none of the above
The law of diminishing marginal utility implies that the marginal utility of my fifth hot dog is less than the marginal utility of my second soft drink, other things constant
a. True b. False