The ______________is a period of production long enough for producers to adjust the quantities of all of their resources.
Fill in the blank(s) with the appropriate word(s).
Ans: long run
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Refer to A Negative Externality Problem. Suppose there are no transactions costs. Also suppose the externality is internalized when the damaged parties offer producers a bribe of $10 per unit to reduce their production. Coasian analysis indicates that social gain in this situation will equal
Demand for a good is given by Q = 100 - P. The private marginal cost of production is MCP = 10 + Q. There is a $10 per unit negative production externality in this situation. a. $0 b. $800 c. $1,600 d. $3,200
Suppose the inflation rate target is "0" and the long run federal funds target is also "0." Calculate the federal funds rate if the current inflation rate is 5% and real output is 4.5% below trend output
A) 2.25% B) 5.25% C) 0.5% D) 0.25%
A subsidy is sometimes used by the government to correct the problems associated with
A) negative externalities. B) positive externalities. C) public goods. D) monopolies.
A fixed exchange rate
a. is a declared rate that is maintained by central bank intervention in the foreign exchange market b. is a rate that is fixed by the forces of supply and demand c. is a rate that is determined by trilateral arbitrage d. "fixes" the value of a nation's price level e. is a mechanism for eliminating a trade deficit