The price of a house in Year 1 was $50,000. If the price index for Year 1 is 101, and for Year 2 is 202, the value of the house in Year 2 is ________.
A) $55,000
B) $100,000
C) $150,000
D) $75,000
Answer: B) $100,000
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Which of the following is NOT a cost of inflation?
A) uncertainty cost B) confusion cost C) tax cost D) unemployment cost E) shoe-leather cost
The burden of a per-unit tax will fall disproportionately on consumers when the supply curve is relatively more elastic than the demand curve.
Answer the following statement true (T) or false (F)
Monopolistically competitive firms ________ because in long-run equilibrium price is ________ marginal cost.
A. prevent the efficient use of resources; less than B. use resources efficiently; greater than C. prevent the efficient use of resources; greater than D. use resources efficiently; equal to
When demand for a firm's product decreases, the firm can take a number of steps to adjust costs and quantities supplied to the market. Some are listed below. Which actions are short run and which are long run? Explain your reasoning
a. Layoff 25 percent of the firm's existing employees. b. Declare bankruptcy and sell all of the firm's plant and equipment. c. Require management personnel to take a significant cut in pay. d. Furlough employees for 3 days each month. e. Move to a smaller production facility.