When potential GDP increases, short-run aggregate supply also increases, but long-run aggregate supply does not change
Indicate whether the statement is true or false
FALSE
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Unlike firms in a perfectly competitive market, each firm in a monopolistically competitive market produces a quantity where price is: a. equal to its marginal cost of production. b. less than its marginal revenue
c. more than its marginal cost of production. d. more than its average revenue.
Patterns of trade among nations are primarily determined by
a. cultural considerations. b. political considerations. c. comparative advantage. d. differences in the income elasticity of demand among nations.
A monopolist's marginal cost is less than the price it charges.
Answer the following statement true (T) or false (F)
A firm that produces chemical solvents creates some air pollution because of the emissions from its manufacturing facilities. A tax is imposed on the firm, equal to the costs of environmental damage caused by a unit of the emissions. What is the result?
A. Consumers of the chemical solvents will be willing to pay the full amount of the tax, and so the quantity produced will be unaffected. B. Demand for the chemical solvents will increase. C. The quantity of chemical solvents produced now will be the efficient amount. D. Demand for the chemical solvents will decrease.