In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices.
B. lower prices.
C. lower output.
D. None of these is true.
Answer: D
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The main difference between stabilization policies and structural reform policies is that stabilization policies
A) focus on microeconomic issues and structural reform policies focus on the macroeconomic environment. B) focus on macroeconomic issues and structural reform policies focus on the microeconomic environment. C) are rarely used by reform governments; they prefer to use structural reform policies in their place. D) have smaller economic impacts than structural reform policies. E) create less unemployment than structural reform policies.
When a firm is experiencing decreasing marginal costs, it implies
a. There are diminishing marginal productivity b. There are increasing average costs c. There are constant marginal productivity d. There are increasing marginal productivity
The Laffer curve illustrates that, in some circumstances, the government can reduce a tax on a good and increase the
a. deadweight loss. b. price paid by consumers. c. equilibrium quantity. d. government's tax revenue.
Give two examples of legal actions against price fixing among firms
What will be an ideal response?