The demand curve faced by a perfectly competitive firm
A. has unitary elasticity.
B. is identical to the market demand curve.
C. yields constant total revenues even when price changes.
D. is the same as its marginal revenue curve.
Answer: D
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
If actual output exceeds potential output, ________ shifts upward over time
A) the short-run AD curve B) the short-run AS curve C) the long-run AD curve D) the long-run AS curve
The figure shows two Lorenz curves. Suppose both Lorenz curves measure income. Lorenz curve A shows ________ Lorenz curve B
A) income is more equally distributed than the income shown in B) income is less equally distributed than the income shown in C) the first quintile earns less income than the first quintile earned in D) the fifth quintile earns more income than the fifth quintile earned in
A policy that directly targets the externality:
A. encourages innovation, which matches the goal to stop production of the externality. B. gives firms incentives to find different ways to do things, rather than pay for the right to create the externality. C. Both of the above statements is true. D. None of these statements are true.