Suppose the government finds a major defect in one of a company's products and demands that the product be taken off the market. We would expect that the
a. supply of existing shares of the stock and the price will both rise.
b. supply of existing shares of the stock and the price will both fall.
c. demand for existing shares of the stock and the price will both rise.
d. demand for existing shares of the stock and the price will both fall.
d
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If a perfectly competitive firm produces an output level at which price is less than marginal costs, then the firm should:
A. reduce output to earn greater profits or smaller losses. B. leave its output level unchanged provided it is covering its variable cost. C. expand output to earn greater profits or smaller losses. D. raise its price.
For Outback Steakhouse, seating capacity is limited in the short run. In the long run, they can add as many seats as they want. Therefore, the price elasticity of supply for meals at Outback would be ________ in the short run than in the long run.
A. the same B. more variable C. lower D. higher
Whenever government spending is a substitute for private spending
A. the effects of expansionary fiscal policy are dampened. B. the Ricardian equivalence theorem holds. C. there is a direct multiplier effect. D. interest rates will rise.
A production function shows the greatest amount that a firm will produce given the amount of labor input.
Answer the following statement true (T) or false (F)