If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output.
B. lower price level and lower level of output.
C. higher price level and higher level of output.
D. lower price level and higher level of output.
Answer: A
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Consider an industry with two firms producing similar products. Each firm's total cost (in dollars) is given below. Mega Corp: TC = 5,000 + 100Q Big Inc: TC = 4,000 + 200Q For both firms, average total cost:
A. declines as quantity increases. B. declines as quantity increases for Mega Corp and increases as quantity increases for Big Inc. C. increases as quantity increases. D. is constant for all quantities.
Why is it inefficient to be overinformed?
What will be an ideal response?
Which of the following is an assumption used by monetarists in establishing the quantity theory of money?
a) real GDP is equal to the multiplicative product of the money supply and the price level b) the velocity of money is constant c) households exhibit rational expectations d) households exhibit money illusion e) all of the above
For a monopolist with a downward-sloping demand curve,
A. when the price is equal to zero, marginal revenue is equal to zero. B. the coefficient of price elasticity of demand is zero. C. as price increases, marginal revenue decreases. D. as price decreases, marginal revenue decreases.