Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S1 (point A)
If there is an increase in the wages of motorcycle workers and an increase in the price of motorcycle insurance, a complement to motorcycles, the equilibrium could move to which point?
A) A B) B C) C D) E
D
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Demand-pull inflation is worse than cost-push inflation because, in addition to higher prices, demand-pull inflation also reduces employment
a. True b. False Indicate whether the statement is true or false
The imposition of a per-unit tax on polluting firms will result in the socially efficient level of production only if the tax equals:
a. the marginal social cost plus the marginal private cost. b. the marginal social cost plus the marginal external cost. c. the marginal social cost minus the marginal private cost. d. the average total cost minus the average variable cost.
Suppose there is a firm that has no fixed costs. At the point where marginal cost equals average variable cost,
a. fixed cost is rising b. marginal cost is rising c. average total cost is rising d. average variable cost is falling e. there is no total cost
Microeconomics and macroeconomics are closely intertwined
a. True b. False Indicate whether the statement is true or false