Purely competitive industry X has constant costs and its product is an inferior good. The industry is currently in long-run equilibrium. The economy now goes into a recession and average incomes decline. The result will be:
A. an increase in output and in the price of the product.
B. an increase in output, but not in the price, of the product.
C. a decrease in the output, but not in the price, of the product.
D. a decrease in output and in the price of the product.
Answer: B
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Along a downward-sloping, linear demand curve, total revenue is the greatest
A) where demand is unit elastic. B) where demand is normal. C) where demand is the most elastic. D) where demand is the most inelastic.
In the endogenous growth model, an increase in a worker's level of human capital
A) increases the amount of additional human capital she can produce, but does not increase the amount of output she can produce. B) increases the amount of additional output she can produce, but does not increase the amount of human capital she can produce. C) increases both the amount of additional human capital she can produce and the amount of output she can produce. D) increases neither the amount of additional human capital she can produce nor the amount of output she can produce.
Price floors are used as a method to:
a. ensure buyers that goods won't be cheaper tomorrow. b. see that production levels don't fall too low. c. guarantee there will be enough food for everyone. d. combat excess demand in the market. e. ensure sellers a minimum price for their goods.
Global capital flows have completely broken the link between domestic savings and domestic investment
Indicate whether the statement is true or false