The exit of existing firms from an industry will very likely
A. shift the industry supply curve to the left.
B. cause the market price to rise.
C. eliminate the losses of existing firms in the industry.
D. All of the responses are correct.
Answer: D
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
One disadvantage of a partnership is
A) limited liability. B) lower monitoring costs. C) difficulty raising funds. D) it permits greater specialization.
A movement upward along the consumption function can be caused only by a(n)
a. increase in disposable income. b. decrease in disposable income. c. decrease in the price level. d. increase in the price level.
When the price of a bracelet was $28 each, the jewelry shop sold 128 per month. When it raised the price to $32 each, it sold 112 per month. Using the midpoint method, the price elasticity of demand for bracelets is
a. 1.14. b. 1. c. 0.25. d. 0.13.