Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. lower; higher
D. higher; potential
Answer: D
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In monopolistic competition, a firm can set the price for its product because of
A) easy entry and exit. B) economic profits. C) product differentiation. D) many competitors. E) the firm's upward sloping demand curve.
The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. How much consumer surplus is lost?
A) $10,000 B) $20,000 C) $25,000 D) $40,000
What is the profit-maximizing rule for a monopolistically competitive firm?
A) to produce a quantity that maximizes market share B) to produce a quantity that maximizes total revenue C) to produce a quantity such that price equals marginal cost D) to produce a quantity such that marginal revenue equals marginal cost
If goods X and Y are complements, then the cross price elasticity of demand will be
A) elastic. B) greater than zero but less than 1. C) negative. D) positive.