Short run market supply curves are formed by adding up individual firm supply curves in the industry.
Answer the following statement true (T) or false (F)
True
Rationale: In the short run, the number of firms in the industry is fixed -- which means we can add their supply curves.
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A fall in the price of cabbage from $10.50 to $9.50 per bushel increases the quantity demanded from 18,800 to 21,200 bushels. The price elasticity of demand is
A) 0.80. B) 1.20. C) 1.25. D) 8.00.
When a country that imports a particular good imposes a tariff on that good,
a. consumer surplus increases and total surplus increases in the market for that good. b. consumer surplus increases and total surplus decreases in the market for that good. c. consumer surplus decreases and total surplus increases in the market for that good. d. consumer surplus decreases and total surplus decreases in the market for that good.
In the fall of 2008, the Federal Reserve reduced its target for the federal funds rate dramatically. The Fed likely made this decision because it believed:
A. there was threat of a recession and was trying to stimulate the economy. B. inflation might become a problem and was moving to head it off. C. savers are not being given enough encouragement to save. D. unemployment was too low and needed to be boosted.
An oligopolistic market may be difficult to enter because of government regulation or the expense of nonprice competition.
Answer the following statement true (T) or false (F)