Assume a monopolistically competitive firm encounters a decrease in average variable cost at all output levels.We would expect:
a. The price to fall and output to rise
b. The price to fall and output to fall
c. The price to rise and output to rise
d. The price to rise and output to fall
a
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A price ceiling in the market for gasoline that is below the equilibrium price will lead to
A) the quantity demanded of gasoline exceeding the quantity supplied. B) an increase in the demand for gasoline. C) a decrease in the supply of gasoline. D) the quantity supplied of gasoline exceeding the quantity demanded. E) no change in the market since the price ceiling is below the equilibrium price.
What action did many Japanese car manufacturers take in response to the stronger yen following the 2007-2009 financial crisis?
A) They only accepted payments in the form of yen. B) They chose to target China as the primary market for exports. C) They abandoned the market in the United States. D) They moved their production to the United States.
The conventional view among economists is that persistent budget deficits lead to a ________ capital stock and a ________ level of potential GDP in the long run
A) larger; higher B) larger; lower C) smaller; higher D) smaller; lower
The infant industry argument for protectionism suggest that an industry must be protected in the early stages of its development so that: a. firms will be protected from subsidized foreign competition
b. domestic producers can attain the economies of scale to allow them to compete in world markets. c. there will be adequate supplies of crucial resources in case they are needed for national defense. d. domestic unemployment will be reduced.