If there is an increase in market demand in a perfectly competitive market, then in the short run
a. there will be no change in the demand curves faced by individual firms in the market.
b. the demand curves for firms will shift downward.
c. the demand curves for firms will become more elastic.
d. profits will rise.
d
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
"The market has failed to provide enough rental housing in New York City. This demonstrates another failure of free markets-they may lead to shortages of necessities." Explain why you agree or disagree
The question of how much labor a firm will hire comes down to:
A. whether the value of the marginal product is greater than, less than, or equal to the average total cost. B. whether added workers are going to generate more revenue than what it costs to hire them. C. if the added workers are going to add revenues to the firm. D. the healthcare costs they incur by hiring them.
When a firm is at its short-run break-even point
A. economic profits are negative but the firm should continue to produce because accounting profits are positive. B. economic profits equal zero and the firm should shut down. C. economic profits are positive. D. economic profits equal zero and the firm is earning a nominal rate of return on investment.