Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential
B. expansionary; lower; potential
C. expansionary; higher; potential
D. recessionary; lower; lower
Answer: A
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In the figure above, when 4,000 pizzas are produced, the marginal benefit of a pizza ________ its marginal cost, which means ________ pizza is being produced
A) exceeds; too little B) exceeds; too much C) is below; too much D) is below; too little E) equals; the efficient quantity of
In the figure above, at the point where the price is $60 per bunch, the price elasticity of supply is
A) 1.8 B) 0.56 C) 1 D) 1.5 E) 0
A cartel is a group of firms that
A) produce differentiated products. B) produce products that are complements. C) agree to restrict output to boost their profit. D) agree to boost output to boost their profit.
The manager of Slick Lens, a sunglasses manufacturer, notices that the cost to distribute their sunglasses in the spot market has fallen. As a result of the change, which of the following is true?
A) The manager has less of an incentive to integrate backward. B) The manager has more of an incentive to integrate forward. C) The manager has less of an incentive to integrate forward. D) The manager has more of an incentive to integrate backward.