The short-run aggregate supply curve (in the absence of misperceptions)
A. slopes downward.
B. is horizontal.
C. is vertical.
D. slopes upward.
Answer: B
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A constant-cost, perfectly competitive market is in long-run equilibrium. At present, there are 1,000 firms each producing 400 units of output. The price of the good is $60
Now suppose there is a sudden increase in demand for the industry's product which causes the price of the good to rise to $64. In the new long-run equilibrium, how will the average total cost of producing the good compare to what it was before the price of the good rose? A) The average total cost will be the same as it was before the price increase. B) The average total cost will be lower than it was before the price increase because of economies of scale. C) The average total cost will be higher than it was before the price increase because of diseconomies of scale arising from the increased demand. D) The average total cost will be higher than it was before the price increase since the increase in demand will drive up input prices.
Consider the hypothetical supply and demand of Kidneys.
Suppose Kidneys cannot be sold, only donated (price is zero). How many kidneys are donated in this hypothetical situation?
A. 0
B. 900
C. 2000
D. 1200
In one sense ________ appears surprising since it means that the bank is not ________ its portfolio of loans and thus is exposing itself to more risk
A) specialization in lending; diversifying B) specialization in lending; rationing C) credit rationing; diversifying D) screening; rationing
Which of the following describes monopolistic competition?
A) homogeneous products B) P = MR = MC C) Advertising plays a key role. D) There is only one seller in the industry.