The supply function for good X is given by Qxs = 1,000 + PX - 5PY - 2PW, where PX is the price of X, PY is the price of good Y and PW is the price of input W. If PX = 100, PY = 150, PW = 50, then the supply curve is
A. Qxs = 150 + Px.
B. Qxs = 550 + Px.
C. Qxs = 350 + Px.
D. Qxs = 550.
Answer: A
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Monitoring a monopoly to keep it efficient would itself be efficient if the extra profit achieved by:
A. raising production costs is less than the costs of monitoring. B. reducing production costs is less than the costs of monitoring. C. reducing production costs exceeds the costs of monitoring. D. raising production costs exceeds the costs of monitoring.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.
From 1975 to 1995, the value of the dollar in terms of yen fell from over 300 yen per dollar to about 100 yen per dollar. Considering the impact of this alone, this would likely:
A. make the U.S. AD curve steeper. B. shift the U.S. AD curve to the left. C. shift the U.S. AD curve to the right. D. make the U.S. AD curve flatter.