A monopolistically competitive firm that earns a profit in the short run will definitely incur a loss in the long run
a. True
b. False
Indicate whether the statement is true or false
False
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When the supply (curve) of a product increases,
A) suppliers change their plans. B) demanders change their plans. C) the price changes. D) all of the above occur. E) none of the above occur.
An advocate of supply-side fiscal policy would advocate which of the following?
a. Subsidies to produce technological advances. b. Reduction in regulation. c. Reduction in resource prices. d. Reduction in taxes. e. All of these.
The "Public Choice" school of economists argue that:
a. the invisible hand of the market is inefficient in allocating resources to their best uses. b. the government often does not take correct economic decisions as it is run by self-interested politicians. c. the government takes correct decisions as it is run by conscious and educated individuals. d. the market fails to maximize social efficiency. e. the government is a non-profit making organization which works to maximize social efficiency.
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward