Negative supply shocks confront the Fed with a dilemma because
a. full employment is no longer possible
b. the costs of fulfilling one objective are paid in terms of failure to meet the other
c. inflation cannot be prevented considering the reduced supply
d. all policy choices are equally undesirable
e. such shocks are entirely unpredictable
B
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For a monopolistic competitor, marginal revenue at its short-run equilibrium price and quantity equals:
a. price. b. marginal cost. c. average cost. d. average revenue.
The supply and demand conditions facing a firm that makes widgets and generates a negative externality by dumping a highly toxic sludge in a nearby river is given in the table below. The equilibrium price and quantity when only private costs are taken into account are
A. Price = $55, Quantity = 30 B. Price = $40, Quantity = 55 C. Price = $30, Quantity = 20 D. Price = $30, Quantity = 80
Suppose that the price of macaroni rises. Quantity supplied will ________ and producer surplus will ________.
A. increase; increase B. increase; decrease C. decrease; increase D. decrease; decrease
Economics is a part of the
A. hard sciences. B. social sciences. C. natural sciences. D. biological sciences.