Macroeconomists are interested in how consumers respond to changes in the market real interest rate because
A) interest rates are an important channel for the effects of monetary and fiscal policies.
B) substitution effects and income effects net out in the aggregate.
C) of the permanent income hypothesis.
D) future income affects current consumption.
A
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Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each. Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Firm X ($/day) $500$514$530$555$585 Cost to Firm Y ($/day) $400$420$445$480 $520Cost to Firm z ($/day) $300$325$360$400 $550For all three firms, the marginal cost of pollution abatement is:
A. increasing B. decreasing C. decreasing and then increasing D. constant
Of the following, consumer surplus is largest for
A) a perfectly competitive industry. B) a single-price monopoly. C) any price-discriminating monopoly. D) a perfectly price-discriminating monopoly.
Refer to Figure 13-18. Which of the following statements is true?
A) Da represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the long-run demand curve in an increasing-cost industry. B) Da represents the long-run supply curve in a perfectly competitive, constant-cost industry while Db depicts the long-run demand curve facing a monopolistic competitor in a decreasing-cost industry. C) Da represents the long-run demand curve facing a perfect competitor while Db depicts the long-run demand curve facing a monopolistic competitor. D) Da represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the demand curve in the short run.
Use the above table to answer these questions: (a) In what year did disinflation begin? (b) In what year did deflation begin?
