Assume a purely competitive decreasing-cost industry is initially in long-run equilibrium but then there is a decrease in consumer demand. After all economic adjustments to this new situation have taken place, product price will be:
A. Higher, but total output will be lower
B. Lower, and total output will be lower
C. Higher, and total output will be higher
D. Lower, but total output will be higher
A. Higher, but total output will be lower
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Refer to Cournot Problem. In the Nash Equilibrium, the deadweight loss will be
a. $300 b. $450 c. $600 d. $900
If the level of consumption is? $120 billion and disposable income is? $150 billion, then the
A. APC? = 0.8 and saving is positive. B. APC? = 0.8 and saving is negative. C. APC? = 0.75 and saving is positive. D. APC? = 0.75 and saving is negative.
Based on the graph showing an increase in the growth of the money supply, as soon as workers realize their real wages have fallen, they will demand higher wages, which ______.
a. shifts the short-run Phillips curve to the left
b. shifts the short-run Phillips curve to the right
c. moves the economy back down the Phillips curve to Point A
d. moves the economy back up the Phillips curve to Point B
If the Board of Governors of the Federal Reserve System increases the legal reserve ratio, this change will:
A. Increase the excess reserves of member banks and thus increase the money supply B. Increase the excess reserves of member banks and thus decrease the money supply C. Decrease the excess reserves of member banks and thus decrease the money supply D. Decrease the excess reserves of member banks and thus increase the money supply