When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline
B. increase; raise; decline
C. decline; lower; expand
D. decline; raise; decline
Answer: C
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How does the decreasing use of DVD players affect the market for prerecorded DVDs?
A) The demand curve for prerecorded DVDs shifts to the left. B) The quantity of prerecorded DVDs demanded decreases. C) The quantity of prerecorded DVDs demanded increases. D) The demand curve for prerecorded DVDs shifts to the right.
A perfectly competitive firm is a price
a. giver. b. taker. c. maker. d. leader.
A perfectly price-discriminating monopolist:
A. captures some or all of the consumer surplus. B. shifts the demand curve for its product to the right by producing where MC = MR. C. will cause a greater welfare loss than will a monopolist that is not price-discriminating. D. increases both consumer surplus and producer surplus.
Suppose a monopolist and a perfectly competitive firm have the same cost curves. The monopolistic firm would:
A. charge a lower price than the perfectly competitive firm. B. charge a higher price than the perfectly competitive firm. C. charge the same price as the perfectly competitive firm. D. refuse to operate in the short run unless an economic profit could be made.