The aggregate supply curve shows
A. how the cost of living is related to the sum of consumption, investment, and government spending.
B. how demand for final products is related to the price level.
C. how production in the economy is related to the price level.
D. None of the choices are shown by the aggregate supply curve.
C. how production in the economy is related to the price level.
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Describe the Cournot model
What will be an ideal response?
A concentration ratio provides a better assessment of market power than the Herfindahl-Hirschman index does.
Answer the following statement true (T) or false (F)
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.
The net loss from trade diversion for a country is likely to be smaller if
A. the good can be produced at relatively lower cost in the bloc-partners than in the outside world. B. the bloc partner's export price is closer to the tariff-inclusive price for imports from countries outside the bloc. C. the county's import demand is more elastic. D. the country's tariff rate on the product is higher.