In long-run equilibrium, a monopolistically competitive firm achieves:
A. productive efficiency but not allocative efficiency.
B. allocative efficiency but not productive efficiency.
C. neither allocative efficiency nor productive efficiency.
D. productive and allocative efficiency.
Answer: C
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If the equilibrium level of real GDP per year is greater than the full-employment level of GDP, then
A) the economy is at full employment with no price changes. B) the economy expands the level of real GDP. C) an inflationary gap occurs. D) a recessionary gap occurs.
The price of gasoline has risen and the quantity sold has fallen. This was likely caused by
A. a rise in the price of crude oil. B. a seasonal rise in the demand for gasoline. C. use of a new public transit system. D. the discovery of crude oil deposits in South Dakota.
Special interest group Z receives a 1/200th slice of the economic pie. Its net benefit from both an economic growth policy and a transfer policy is $60,000. How much does the size of the economic pie (Real GDP) need to grow before group Z is indifferent between the two policies?
A. $300 B. $120,000 C. $120,000,000 D. $12,000,000 E. none of the above
The Heckscher-Ohlin Theorem predicts
A) who benefits and who loses from trade. B) which factors are abundant. C) the income distribution effects of trade. D) which goods will be exported. E) the importance of intraindustry trade.