A decrease in input prices will cause
A. AS to increase (move down and to the right).
B. AS to decrease (move up and to the left).
C. AD to decrease (move to the left).
D. AD to increase (move to the right).
Answer: A
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In the figure above, both Joe and Jill initially produce at point A. If Joe and Jill realize that they each possess a comparative advantage, which outcome can we expect?
A) Joe will specialize in shirts and Jill will specialize in pants. B) Joe will specialize in pants and Jill will specialize in shirts. C) Joe and Jill each will be able to consume more than 2 shirts and 2 pairs of pants. D) Both answers B and C are correct.
In the above figure of a monopolistically competitive firm, in the long run after all industry adjustments have taken place, assuming that this firm's costs have not changed the firm will
A) produce more output at a higher price. B) produce less output at a lower price. C) produce the same quantity at the same price. D) Any of the above are possible.
Refer to the above figures. A tariff is placed on a foreign good. Which figures represents the situation in the domestic market for a competing domestic good?
A) Panel A B) Panel B C) Panel C D) Panel D
Firms can practice indirect price discrimination by
a. Offering volume discounts b. Using two-part pricing c. Offering a bundle containing a number of units d. All of the above