Inflation:
A. redistributes income from those who can raise prices to those who cannot.
B. can obscure relative price changes.
C. can undermine faith in the monetary system, the economy, and the government if it is high enough.
D. makes society poorer on average.
Answer: B
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At market equilibrium
A) shortages are greater than surpluses. B) surpluses are greater than shortages. C) quantity demanded equals quantity supplied. D) demand equals supply.
Suppose a firm is considering producing zero units of output. We call this shutting down in the short run and exiting an industry in the long run
a. True b. False Indicate whether the statement is true or false
Dara lives in an agricultural society with 2 million acres of farmable land. The population of Dara’s country is growing at a rate of 3 percent. Assuming there is no way to increase the amount of land available, the law of diminishing returns means that ______.
a. output will fall as less land is available per worker b. output will rise, but by ever shrinking amounts c. the country’s output will rise by about 3 percent annually d. innovation will increase output to meet demand
Two firms compete as a Stackelberg duopoly. The demand they face is P = 24 ? Q. The cost function for each firm is C(Q) = 4Q. The profits of the two firms are:
A. ?L = $100; ?F = $50. B. ?L = $20; ?F = $10. C. ?L = $50; ?F = $25. D. ?L = $25; ?F = $12.5.