The short run is
A) a period of time during which at least one input cannot be changed.
B) a period of time during which no inputs can be changed.
C) a period of time during which all inputs can be changed.
D) a period of time shorter than one year.
Answer: A
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The above figure shows the U.S. market for flip-flops. When there is no international trade, the U.S. price is ________ per flip-flop and the U.S. quantity is ________ flip-flops
A) $14; 300,000 B) $14; 500,000 C) $14; 700,000 D) $12; 700,000 E) $12; 300,000
We collapse the consumer's current-period and future-period budget constraints into a single lifetime budget constraint by
A) assuming no default. B) substituting for savings. C) eliminating consumption smoothing. D) assuming the consumer knows the future.
According to the Coase theorem, private parties can solve the problem of externalities if
a. the cost of bargaining is small. b. the initial distribution of legal rights favors the person being adversely affected by the externality. c. the number of parties involved is sufficiently large. d. All of the above are correct.
Market power is illegal
A) True, no one is allowed to charge a price greater than marginal cost. B) False. C) True, no one is allowed to charge a price greater than average cost. D) False, because market power guarantees price equal to average cost.