Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium quantity of beef will
A) decrease.
B) perhaps increase, decrease, or stay the same, but more information is needed to determine which it does.
C) stay the same.
D) increase.
E) definitely either stay the same or decrease.
D
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Interest rates in the economy have risen. How will this affect aggregate demand and equilibrium in the short run?
A) Aggregate demand will rise, the equilibrium price level will fall, and the equilibrium level of GDP will rise. B) Aggregate demand will rise, the equilibrium price level will rise, and the equilibrium level of GDP will rise. C) Aggregate demand will fall, the equilibrium price level will fall, and the equilibrium level of GDP will fall. D) Aggregate demand will fall, the equilibrium price level will rise, and the equilibrium level of GDP will fall.
At its present rate of output, 200 units, a perfectly competitive firm has total cost of $10,000 . marginal cost of $38, and fixed cost of $2,000 . and it charges the market price of $38 per unit. To maximize profit or minimize loss, this firm should
a. increase output b. reduce output but not to zero c. maintain the present rate of output d. shut down e. raise the price
_________ arises when a small number of large firms have all or most of the sales in an industry.
a. Perfect competition b. Oligopoly c. Monopolistic competition d. Production efficiency
Deciding that A causes B when in fact B causes A is a mistake called omitted variable bias
a. True b. False Indicate whether the statement is true or false