If demand increases and supply decreases, the change in the equilibrium price will be ________, and the change in the equilibrium quantity will be ________.
A. uncertain; positive
B. positive; uncertain
C. positive; positive
D. positive; negative
Answer: B
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If marginal revenue is negative then the revenue lost from receiving a lower price on all the units that could have been sold at the original price is smaller than the additional revenue from selling one more unit of the good
Indicate whether the statement is true or false
If a monopoly's Lerner Index exceeds 1, then
A) it is earning maximum profit. B) it has ultimate market power. C) it must be pricing below marginal cost. D) marginal revenue is negative.
A country has an absolute advantage in the production of a good if that country
a. can produce the good using fewer resources than another country would require b. has the lowest opportunity cost of producing the good and can produce it with the fewest resources c. has the lowest opportunity cost of producing the good regardless of whether it is produced with the fewest resources d. has the greatest opportunity cost of producing the good regardless of whether it is produced with the fewest resources e. has the greatest opportunity cost of producing the good and produces it with the fewest resources
If the long-run industry supply curve in a perfectly competitive market slopes upward, then very likely input prices will ____ as industry output expands
a. increase b. decrease c. remain constant d. first increase and then decrease