Which of the following would be classified as a short-run decision?
A) A firm's decision to decrease the amount of electricity used in day-to-day operations by encouraging employees to adopt conservation strategies, e.g., shut off lights when leaving a room.
B) A restaurant's decision to increase the number of patrons it can accommodate by adding on a new dining room.
C) A trucking firm's decision to move to a smaller facility.
D) A university's decision to add a new residence hall.
A
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The Bertrand model of price setting assumes that a firm chooses its price
A) independently of what price other firms charge. B) subject to what price rival firms are charging. C) so that joint profits are maximized. D) without considering the shape of the demand curve.
Monopolies misallocate resources because
A) price does not equal marginal cost. B) price does not equal average variable cost. C) marginal cost does not equal average total cost. D) profits are usually positive.
If a country moves from fixed to flexible exchange rates, its macroeconomic policy
A. is restricted, as it can only use fiscal policy to achieve its economic goals. B. must follow policy directives from the IMF. C. is restricted, as it can only use monetary policy to achieve its economic goals. D. is no longer restricted.
When people become unemployed because of a higher minimum wage, this type of unemployment is called:
a. frictional. b. structural. c. cyclical. d. abnormal.