Refer to Figure 12-14. Consider a typical firm in a perfectly competitive industry which is incurring short-run losses. Which of the diagrams in the figure shows the effect on the industry as it transitions to a long-run equilibrium?
A) Panel A B) Panel B C) Panel C D) Panel D
A
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The above figure shows the supply curves in four different markets. If each of the markets has an identical downward sloping demand curve and the same tax is levied on suppliers, which market would produce the largest amount of deadweight loss?
A) A B) B C) C D) D E) A and D
If oil prices fall at the same time that the federal government increases its purchases, in the short run
A) aggregate output and the price level will both increase. B) aggregate output will increase, but the price level will fall. C) aggregate output and the price level will both fall. D) aggregate output will increase, but the price level may either increase or decrease.
When a firm can achieve economies of scale by expanding, its long-run ATC curve:
A. slopes downward. B. slopes upward. C. is flat. D. Any of these is possible.
When the dollar depreciates, the cost to Americans of foreign goods
a. rises and the CPI falls. b. rises and the CPI rises. c. falls and the CPI rises. d. falls and the CPI falls.