Suppose a perfectly competitive constant-cost industry is in long-run equilibrium when market demand suddenly falls. What happens to the industry in the long run?
a. It experiences no change form the original equilibrium
b. It experiences a higher equilibrium price and produces more output
c. It experiences a lower equilibrium price but produces more output
d. It experiences the same equilibrium price but produces more output
e. It experiences the same equilibrium price but produces less output
E
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The United States is one of the most “marketized” economies in the world.
Answer the following statement true (T) or false (F)
Tele-Com, Inc., the nation’s largest cable TV company, tested the effect of a price reduction for the Disney Channel. It lowered prices from $10.75 to $7.95 and found that the number of customers more than doubled. This means the
A. demand curve for the Disney Channel shifted to the right. B. supply curve of the Disney Channel shifted to the left. C. demand for the Disney Channel is elastic in this price range. D. demand for the Disney Channel is inelastic in this price range.
The law that established the Federal Reserve System is the _____
a. Federal Reserve Act of 1913 b. National Banking Act of 1863 c. Banking Act of 1933 d. National Banking Act of 1813 e. Federal Reserve Act of 1963
The demand for money varies:
A. inversely with wealth. B. inversely with the liquidity of other financial assets. C. directly with the liquidity of other financial assets. D. not all with the liquidity of other assets since money is liquid.