The entry of new firms into a competitive industry will very likel
a. shift the short run industry supply curve to the right
b. cause the market price to fall
c. reduce the profits of firms in the industry
d. cause the market quantity sold to rise
e. all of the above
e. all of the above
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The tables above show the marginal costs and benefits from production and consumption of paper. From this information we can see that there are
A) external costs of producing paper. B) external benefits of producing paper. C) no externalities in production of paper. D) external costs from consuming paper.
The purpose of functional finance is to
A. decrease deficits through monetary policy. B. use fiscal policy to keep aggregate demand at the desired level, regardless of the impact on deficits. C. tax corporate income first at the corporate level, and then again when it is distributed to shareholders. D. use monetary policy to keep deficits stable over time.
If float is predicted to increase because of bad weather, the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves
A) defensive; inject B) defensive; drain C) dynamic; inject D) dynamic; drain
Demand for a good becomes more elastic as:
a. the number of substitutes available declines. b. the time period under consideration becomes shorter. c. a good makes up a larger percentage of a consumer's budget. d. a good makes up a smaller percentage of a consumer's budget. e. the producer has more time to respond to price changes.