Refer to Figure 17-9. A(n) ________ would be depicted as a movement from A to D to C
A) increase in short-run aggregate supply
B) supply shock, such as rising oil prices,
C) implementation of contractionary monetary policy
D) increase in aggregate demand
B
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Suppose that all firms in a constant-cost industry have the following long-run cost curve:
c(q) = 4q2 + 100q + 100 The demand in this market is given by QD = 1280 - 2p. Suppose the number of firms in the market is restricted to 80 a. Derive the supply curve with this restriction. Find the market equilibrium price and quantity with the restriction. b. If firms are allowed to buy and sell these permits in an open market, what will be the rental price of permits? Will firm's that own permits make profit? Briefly explain. c. How much deadweight loss is generated by the permit system? Provide a graph showing the region of this deadweight loss. d. Suppose the government abandons the permit system and simply imposes a fixed fee on firms in the market. If the fee is set equal to the permit price you found in c., what will be the equilibrium price, quantity, number of firms and deadweight loss?
The essence of good management is to determine whether a new practice adds
A) revenue. B) market share. C) customer satisfaction. D) value. E) costs.
A 10 percent increase in the price of butter reduces butter consumption by about 5 percent. The increase causes households to
a. spend more on butter. b. spend less on butter. c. spend the same amount on butter. d. consume more goods like bread that are complements of butter.
According to traditional Keynesian analysis, fiscal policy operates by
A. directly affecting aggregate demand. B. indirectly affecting aggregate demand through its effect on the money supply. C. directly affecting aggregate supply. D. informing business people about its plans for the economy so they will know how to adjust their behavior.