The demand curve for a perfectly competitive firm is ________, while the demand curve for a monopolist is ________.
A. perfectly inelastic; perfectly elastic
B. perfectly elastic; downward-sloping
C. vertical; downward-sloping
D. perfectly elastic; perfectly inelastic
Answer: B
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Which of the following is an example of an external benefit?
A) a ton of coal burned in a power plant to produce electricity B) a car accident that crowds a major Los Angeles freeway C) the production of a slice of pizza D) the cleanup of a large lake E) the consumption of a can of Mountain Dew
Assume the economy is in recession and real GDP is below full employment. The marginal propensity to consume (MPC) is 0.75, and the government follows Keynesian economics by using expansionary fiscal policy to increase aggregate demand (total spending). If an increase of $1,000 billion aggregate demand can restore full employment, the government should:
a. increase spending by $250 billion. b. decrease spending by $750 billion. c. increase spending by $1,000 billion. d. increase spending by $750 billion.
Which of the following is true? a. It is possible to eliminate a surplus by raising a price floor sufficiently. b. It is possible to create a surplus by raising a price ceiling sufficiently
c. It is possible to eliminate a shortage by raising a price ceiling sufficiently. d. It is possible to create a shortage by lowering a price floor sufficiently.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.