An increase in the demand for MP3 music indicates that more are:
A. Purchased even if prices of MP3 music stayed the same
B. Demanded because MP3 music prices decreased
C. Demanded because sellers are selling more MP3 music
D. Purchased because sellers are putting MP3 music on sale
Answer: A
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Which of the following is an example of an international externality?
a. Loss of crops b. Disease epidemic c. Global warming d. Dirty water
In order to practice price discrimination, the firm must
a. offer a good at different prices to different segments of the market b. first establish a monopoly position in the market c. make sure the practice is sanctioned by the government d. select a price so that different segments of the market will demand different quantities e. first collude with the other firms in the industry
Government intervention in the market
A. Always involves an opportunity cost. B. Results in the free-rider dilemma. C. Does not involve an opportunity cost if market outcomes are improved. D. Never involves an opportunity cost because only market activities result in other goods and services being given up.