Assume there is an increase in the number of consumers in the market for a good sold by perfectly competitive firms that are initially producing the profit-maximizing level of output. For the individual firm, this would result in:
A) a decrease in both price and the profit-maximizing quantity of output.
B) a decrease in price and increase in the profit-maximizing quantity of output.
C) an increase in both price and the profit-maximizing quantity of output.
D) an increase in price and decrease in profit-maximizing quantity of output.
C
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Potential GDP is
A) another name for real GDP. B) the amount of real GDP that the economy would produce if it were at full employment of all resources. C) the value of the maximum amount of output that can be produced at any given time. D) the amount of real GDP that the economy would produce if the unemployment rate was zero. E) the amount of real GDP that the economy would produce if all unemployment was cyclical unemployment.
Let D= demand, S = supply, P = equilibrium price, and Q= equilibrium quantity. What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged?
A) D no change, S decreases, P increases, Q increases. B) D decreases, S no change, P and Q decrease. C) S decreases, D no change, P increases, Q decreases. D) D and S decrease, P and Q increase.
Suppose in the market for used cars, buyers would be willing to pay $9,000 for a car in good condition, while buyers would have to incur a cost of $3,500 to repair a car in poor condition. Assume a risk-averse buyer is aware that some of the cars are lemons, but is uninformed about the probability of a car being in good condition or otherwise. What price would this buyer, seeking only to minimize
risk, be willing to pay for a car? a. $3,925 b. $5,500 c. $7,775 d. $5,850
Which branch of economics is most likely to study differences in countries' growth rates?
A. macroeconomics B. microeconomics C. experimental economics D. normative economics