The industry represented by the graph above where S1 and S2 are short-run supply curves, D1 and D2 are short-run demand curves, and LRS is the long-run supply curve can be said to be:
A. an increasing-cost industry.
B. an average-cost industry.
C. a decreasing-cost industry.
D. a constant-cost industry.
Answer: A
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Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.
A perfectly competitive firm will not operate where MC = MR but at MC = AC.
Answer the following statement true (T) or false (F)
An example of price discrimination is the price charged for:
a. troll dolls. b. college admission. c. textbooks. d. diamonds.
Economic thinking indicates that efficient adaptation strategies to reduce harms from future global warming will
a. focus on reducing overall carbon emissions. b. emphasize changes like those imposed on prosperous nations by the Kyoto Treaty. c. focus on reducing the effects of serious problems that we know to exist. d. ensure that every precaution will be taken to reduce any possible risks for the future.