When supply and demand for a product increase simultaneously, we
A) can predict that both the market clearing price and the equilibrium quantity will increase.
B) can predict that both the market clearing price and the equilibrium quantity will decrease.
C) cannot predict the market clearing price, but know that the equilibrium quantity will increase.
D) cannot predict the change in either the equilibrium quantity or the market clearing price.
C
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An industry in which economies of scale allow one firm to supply the entire market at the lowest possible cost is called a
A) legal monopoly. B) natural monopoly. C) single-price monopoly. D) one-firm monopoly.
Economists study perfect competition
A. because many markets are perfectly competitive. B. for its descriptive realism. C. to establish a benchmark by which to measure the performance of the economy. D. All of the responses are correct.
Which of the following is a fixed cost of driving a car?
a. gasoline b. maintenance c. tires d. license plates e. motor oil
The long run result of the government responding to a negative supply side shock with increased spending will be a:
A. faster recovery, but it will cause even greater inflation. B. slower recovery, if they misjudge their own spending. C. faster recovery at a lower price level than allowing short-run aggregate supply to adjust on its own. D. slower recovery, but it will cause inflation to be lower than if they did nothing.