A positive temporary supply side shock will:
A. increase the level of potential output in the long run.
B. decrease the price level in the long run.
C. increase the price level in the long run.
D. have no effect in the long run.
Answer: D
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According to the short-run aggregate supply curve, firms are most likely to respond to an increase in aggregate demand by raising ________.
A. prices B. production C. both production and prices D. neither production nor prices
A monopoly will NOT be able to perfectly price discriminate if
A) obtaining information about each buyer's reservation price is too costly. B) demand is very elastic. C) demand is very inelastic. D) resale is impossible.
The infant industry argument suggests that
A) a country requires tariff protection when it has no comparative advantage in the production of any good. B) a country requires protection against unfair trade practices. C) an industry may require temporary tariff protection until the industry matures. D) the industry has no potential and must be protected to survive.
The value of a producer's output minus the value of the inputs it purchases from other producers is called the producer's
A. surplus. B. gross product. C. value added. D. profit.