There has been a decrease in investment. As a result, real GDP will ________ in the short run, and ________ in the long run
A) increase; decrease to its initial value B) decrease; decrease further
C) decrease; increase to its initial level D) increase; increase further
C
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If this pollution occurs, one way of reaching efficient production levels is by setting a Pigovian Tax. To achieve efficiency with this tax means that the tax must equal the
A) marginal social cost. B) marginal private cost. C) marginal private benefit. D) marginal external cost.
If a firm’s marginal profit is negative, it should reduce its output level.
Answer the following statement true (T) or false (F)
Which of the following best describes a cartel?
a. As a monopolist, a group of monopolistically competitive firms that jointly reduce output and raise the price. b. As a monopolist, a group of cooperating oligopolists that jointly reduce output and raise the price. c. A monopolist that reduces output and raises price. d. A group of identical non-cooperative oligopolists that are able to reproduce a monopoly equilibrium through price rivalry.
The short-run equilibrium output of a competitive firm is found by equating marginal cost with price
a. True b. False Indicate whether the statement is true or false