Refer to Figure 2-1. Point C is
A) technically efficient.
B) unattainable with current resources.
C) inefficient in that not all resources are being used.
D) is the equilibrium output combination.
B
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Answer the next question based on the following demand and cost data for a specific firm.Demand DataCost Data(1) Price(2) Price(3) QuantityTotal OutputTotal Cost$50$3522$4545303355402544703520559030156611525107714520588180In the long run, the number of firms in this monopolistic competitive industry will most likely
A. stay the same. B. decrease. C. increase. D. cannot be determined from the given data.
Suppose that electricity producers create a negative externality equal to $6 per unit. Further suppose that the government imposes a $8 per-unit tax on the producers. What is the relationship between the after-tax equilibrium quantity and the socially optimal quantity of electricity to be produced?
a. They are equal. b. The after-tax equilibrium quantity is greater than the socially optimal quantity. c. The after-tax equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.
The mutual interdependence that characterizes oligopoly arises because:
A. the products of various firms are homogeneous. B. the products of various firms are differentiated. C. each firm in an oligopoly depends on its own pricing strategy and that of its rivals. D. the demand curves of firms are kinked at the prevailing price.