In the short run, if prices were below equilibrium,
a. excess aggregate demand for goods and services would place downward pressure on prices.
b. excess aggregate supply of goods and services would place downward pressure on prices.
c. excess aggregate demand for goods and services would place upward pressure on prices.
d. excess aggregate supply of goods and services would place upward pressure on prices.
C
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Hold-up problems usually occur when
a. One of the parties makes a heavy investment in equipment specific to its trading partner b. One of the firms decides to invest heavily in general purpose equipment c. Costs are avoidable d. Costs are incurred
Society's total cost of producing a good
a. includes only the cost to the firm b. includes only the external cost c. includes all private and external costs d. equals the value of the output level that maximizes the firm's profit e. equals the value of the output level that minimizes the firm's loss
Which of the following represents the firm's long-run condition for exiting a market?
a. exit if P < MC b. exit if P < FC c. exit if P < ATC d. exit if MR < MC
The change in the ________ of a good leads to a change in ________, which leads to a ________.
A. quantity; supply; change in demand B. price; quantity supplied; movement along a supply curve C. supply; demand; change in price D. demand; quantity demanded; supply