An optimal allocation of resources is one which is
A. unfair.
B. fair.
C. efficient.
D. inefficient.
Answer: C
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If the elasticity of demand for cigarettes is 0.4, then an increase in the price of a pack of cigarettes from $5.00 to $6.00 would reduce quantities demanded by about
A. 7 percent. B. 40 percent. C. 42 percent. D. 220 percent.
As new firms enter a decreasing-cost industry
A. the LRAC curve shifts down. B. the position of the LRAC curve doesn't change, but firms move down their LRAC curve. C. the position of the LRAC curve doesn't change, but firms move up their LRAC curve. D. the LRAC curve shifts up.
Holding other things constant, decreases in the price level in the US will
a. Cause the dollar to appreciate b. Cause the dollar to depreciate c. Does not affect the dollar value d. None of the above
Wage differentials exist in the long run because
a. labor markets are perfectly competitive b. all jobs are equally attractive to all workers c. the prices of goods vary by market d. there are too many workers in the labor force e. not all workers are equally qualified to perform every job