Assume dental care is provided by a competitive industry. A new government regulation requires each dentist to take a costly new exam for certification. What happens to the price of dental care?
a. The price of dental care rises in the short run and rises further in the long run.
b. The regulation will cause higher prices in the short run, but it will have no long-run impact.
c. There is no change in the short run, but dentists will exit and prices will rise in the long run.
d. The exam is a sunk cost, so the price of dental care does not change in either the short run or the long run.
c. There is no change in the short run, but dentists will exit and prices will rise in the long run.
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Market equilibrium is: a. defined as the condition in which there is neither a shortage or surplus
b. defined as the condition under which the separately formulated plans of buyers and sellers exactly mesh when tested in the market. c. represented graphically by the intersection of the supply and demand curves. d. all of the above.
Data on education and earnings reveal:
A. negative age-earnings profiles for male workers. B. no relationship between the two. C. a positive relationship between the two. D. a negative relationship between the two.
Under perfect competition, the firm must decide
A. the best rate of output it should produce. B. the best price to charge for its product. C. the optimal level of advertising to engage in. D. the optimal level of quality and the packaging that will maximize profits.
Which of the following will increase the real interest rate?
A) an increase in the supply of loanable funds B) an increase in household saving C) an increase in the demand for loanable funds D) an increase in the budget surplus