The long run is a period of time:
a. that is too short to change the size of a firm's plant.
b. that is long enough to permit changes in all the firm's inputs, both fixed and variable.
c. in which production occurs beyond one year.
d. in which production occurs beyond five years.
b
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If the Federal Reserve wants to reduce inflation from 4 percent to 3 percent permanently, how can that goal be achieved, and what impact will that have on employment in the short run and the long run? Support your answer with a graph of the Phillips
curve in the short run and the long run.
An increase in the demand for shoemakers will increase the demand for shoes
a. True b. False
Consider the production possibilities frontier in the figure shown. The opportunity cost of moving from point A to point B is:
A. 5 cars per cigar.
B. 10 cars per cigar.
C. 5 cigars per car.
D. 10 cigars per car.
A price discriminating pure monopolist will attempt to charge each buyer (or group of buyers):
A. different prices to compensate for differences in the characteristics of the product.
B. the same price if per unit cost is constant for each unit of the product.
C. that price that equals the buyer's marginal cost.
D. the maximum price each would be willing to pay.