Partial equilibrium analysis is the process of examining the equilibrium conditions for households and firms combined for more than one but not all individual markets.
Answer the following statement true (T) or false (F)
False
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If a firm responded to a decrease in demand for its product by cutting its price to increase sales, but then all firms experienced a decrease in demand for their products, sticky prices in the aggregate would prevent aggregate demand from rebounding. This is an example of
a. a macroeconomic externality. b. the Expenditure-Output model. c. the expenditure multiplier. d. the coordination argument.
A monopolist's profit is the product of the price charged by it and the quantity of output produced
a. True b. False Indicate whether the statement is true or false
When a tax is imposed on a good for which both demand and supply are very elastic,
a. sellers effectively pay the majority of the tax. b. buyers effectively pay the majority of the tax. c. the tax burden is equally divided between buyers and sellers. d. None of the above is correct; further information would be required to determine how the burden of the tax is distributed between buyers and sellers.
A firm's long-run supply curve
A. runs up its marginal cost curve starting at the break-even point. B. runs up its marginal cost curve starting at the shutdown point. C. is identical to the firm's entire marginal cost curve. D. runs up the firm's marginal cost curve from the shutdown point to the break-even point.