When the capital (a fixed input) changes
A) short-run marginal costs rise.
B) short-run average total costs fall but do not shift.
C) labor inputs decline.
D) the short-run average total cost curve shifts.
D
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If markets are left to their own devices, the ________ a good or service is desired by buyers, the ________ its price will be
A) more; higher B) more; lower C) less; higher D) less; more unstable
The ________ problem helps to explain why the private production and sale of information cannot eliminate ________
A) free-rider; adverse selection B) free-rider; moral hazard C) principal-agent; adverse selection D) principal-agent; moral hazard
Suppose that a monopolist must choose between two points on its demand curve: it can sell 100 units for $3 each, or it can sell 150 units for $2 each. Which of the following is true?
a. The monopolist is facing elastic demand. b. The monopolist is facing unit elastic demand. c. The monopolist is facing inelastic demand. d. The monopolist is facing perfectly elastic demand. e. The elasticity of demand cannot be determined with the information given.
From the perspective of the classical model, many economists would say that the most important automatic stabilizer is
a. taxes b. imports c. interest rates d. transfer payments e. passage of time