Resource prices that are fixed by long-term contracts help explain why, in the short run, firms will
a. increase output when product prices increase.
b. keep production levels constant when product prices decrease.
c. keep their product prices constant even if the demand for their good increases.
d. keep their product prices constant even if the demand for their good decreases.
A
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A share of stock expected to pay an annual dividend of $10 forever has a market price of __________ when the Treasury bond rate is 6% and the stock has a risk premium of 4%
A) $100.00 B) $166.67 C) $250.00 D) $500.00
On the graphs above, show how the central bank implements a decrease in the inflation target. In words, explain why the change in the real interest rate is temporary
What will be an ideal response?
If the demand for air travel were to change so that business travelers and vacationers have the same price elasticity of demand for air travel,
A) airlines would charge the same price to each type of flyer. B) airlines would still charge business flyers a higher fare since the traveler's employer pays anyway. C) airlines would be driven out of business. D) airlines would counter by charging vacationers a higher fare.
The gap between average total cost and average variable cost:
a. is constant at all ranges of output. b. is high at high levels of production. c. declines as output expands. d. depends on the production technology.