A decrease in the price of peanut butter will increase both the equilibrium price and quantity in the market for jelly
a. True
b. False
Indicate whether the statement is true or false
True
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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
In game theory, a prisoner’s dilemma
A. never has a dominant strategy. B. is equivalent to a Nash equilibrium. C. always has the best result for the players when game is played repeatedly. D. is a game that has a preferred outcome for the players that is not an equilibrium.
Over the last 80 years, the average annual U.S. inflation rate was about
a. 3.6 percent, implying that prices have increased 16-fold. b. 4 percent, implying that prices have increased 17-fold. c. 4 percent, implying that prices have increased 16-fold. d. 3.6 percent, implying that prices increased about 17-fold.
Long-run competitive equilibrium:
A. is realized only in constant-cost industries. B. will never change once it is realized. C. is not economically efficient. D. results in zero economic profits.