The above figure shows the demand and cost curves facing a monopoly. A $100 per unit tax would raise price by
A) $100.
B) $50.
C) $25.
D) $0.
B
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Is supply more elastic or less elastic as more time passes after a price change? Explain your answer
What will be an ideal response?
Refer to Figure 28-2. Suppose the economy is at point A. The Fed uses expansionary monetary policy to lower the unemployment rate permanently below the level associated with A. Which of the following will occur?
A) Inflationary expectations will decline. B) Unemployment will rise above the natural rate. C) Unemployment will accelerate in the long run. D) Inflation will accelerate in the long run.
A vertical demand curve
A) is impossible. B) reasonably represents demand for essential goods. C) has a price elasticity of negative infinity since people will pay an infinite amount for the good. D) represents a normal good.
Advocates of an active approach think that only when unemployment is high, the natural adjustments of wages and prices can be effective
a. True b. False Indicate whether the statement is true or false