Assume the watermelon industry is perfectly competitive and in long-run equilibrium with a market price of $10. If the demand for watermelons increases in this decreasing-cost industry, long-run equilibrium will be reestablished at a price
A. equal to $10.
B. greater than $10.
C. less than $10.
D. either greater than or less than $10, depending on the number of firms that enter the industry.
Answer: C
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If the demand for a good is extremely inelastic, a large increase in the cost of supplying it will
A) raise its price substantially and increase the total dollars spent to purchase it. B) raise its price substantially but decrease the total dollars spent to purchase it. C) raise its price very little and decrease the total dollars spent to purchase it. D) raise its price very little but increase the total dollars spent to purchase it.
Some evidence suggested that intra-industry trade between similar countries had a _______ impact on domestic workers but later evidence indicates that it all depends on how ______ the labor market is.
a. small; sticky b. large; sticky c. small; flexible d. large; flexible
Per capita GDP will definitely fall when
A. Population increases. B. The labor force decreases. C. The population growth rate exceeds the economic growth rate. D. GDP decreases.
During the business cycle, an economic upturn occurs:
A. at the peak of the business cycle. B. in between the trough and peak of the business cycle. C. in between the peak and trough of the business cycle. D. at the trough of the business cycle.