If the demand for a product in an increasing cost perfectly competitive industry increases, we would expect that price in the long run would ________ and the number of firms in the market would ________.
A. decrease; decrease
B. increase; increase
C. decrease; increase
D. increase; decrease
Answer: B
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Assume that both the goods and the labor market are perfectly competitive. If at equilibrium, the marginal cost faced by a firm is $3 and the market wage rate is $6, the marginal product of the last unit of labor hired by the firm must be:
A) 0.5 units. B) 2 units. C) 9 units. D) 18 units.
The short-run market supply curve is
A) the sum of the quantities supplied by all the firms. B) undefined because the number of firms is constant in the short run. C) vertical at the total level of output being produced by all firms. D) horizontal at the current market price.
Assuming initially that the required reserve ratio = 10%, the currency-deposit ratio = 40%, and the excess reserve ratio = 0, an increase in the required reserve ratio to 15% causes the M1 money multiplier to ________, everything else held constant
A) increase from 2.55 to 2.8 B) decrease from 2.8 to 2.55 C) increase from 1.82 to 2 D) decrease from 2 to 1.82
There is a technological advance in the production of digital watches. This will cause:
A. demand to increase. B. supply to increase. C. the price to increase. D. supply to decrease.