Suppose a perfectly competitive market is in long-run equilibrium with a price of $12. Then there is a permanent increase in demand
As a result, in the short run the market price ________ and in the long run the number of firms ________ and the price is ________ the price was in the short run. A) rises; does not change; is equal to
B) rises; increases; higher than
C) rises; does not change; lower than
D) falls; decreases; is equal to
E) rises; increases; lower than
E
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Explain why the purchase and sale of used goods and of financial assets are not included in the calculation of GDP even though transactions in these items amount to billions of dollars daily
What will be an ideal response?
Ordinary Least Squares Regression analysis attempts to
A) maximize the distance of each point from a regression line. B) select a line that fits the data well. C) maximize the residual. D) change a multivariate problem into a single dimension.
Purchasing a season pass to the local symphony
A) is an example of first degree price discrimination. B) is an example of second degree price discrimination. C) is an example of third degree price discrimination. D) All of the above.
Albania wants to maintain its exchange rate of $0.20 per lek. However, the market for lek per U.S. dollar has determined an exchange rate of $0.14 per lek (depreciation of the lek against the U.S. dollar). The Albanian central bank decides to increase the domestic interest rates through a contractionary monetary policy. This would shift the:
A. supply of lek to the right and cause the lek to lose value. B. demand of lek to the left and cause the lek to lose value. C. demand of lek to the right and cause the lek to gain value. D. supply of lek to the left and cause the lek to lose value.