The long-run industry supply curve in a decreasing-cost, perfectly competitive industry is
A. negatively sloped.
B. positively sloped.
C. perfectly inelastic.
D. perfectly elastic.
Answer: A
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Suppose the measured unemployment rate is 4.5% and the true natural rate of unemployment is 5.1%. What should policymakers do in this situation? Suppose that the chair of the Federal Reserve believes the natural rate of unemployment to be 4.0%
What will the chair of the Fed do in this situation, and will this be a good decision?
In a two product two country world, international trade can lead to increases in
A) consumer welfare only if output of both products is increased. B) output of both products and consumer welfare in both countries. C) total production of both products but not consumer welfare in both countries. D) consumer welfare in both countries but not total production of both products. E) prices of both goods in both countries.
Diseconomies of scale:
a. occur only in the short run. b. occur when at least one resource is fixed and unit costs decrease as the quantity of production increases. c. occur when at least one resource is fixed and unit costs increase as the quantity of production increases. d. are represented by the upward-sloping portion of the short run average total cost curve. e. occur when all resources are variable and unit costs increase as the quantity of production increases.
How are tradable pollution permits used?
a) They are permits bought by firms where prices are set by governments. b) They will be bought by firms that can reduce pollution only at high costs. c) They will be bought by firms that can reduce pollution at low costs. d) They will be used in reducing pollution when corrective taxes cannot be used.