If supply decreases, the increase in price will be smaller if demand and supply are highly elastic.
Answer the following statement true (T) or false (F)
True
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Suppose the market demand curve for cable internet service is completely elastic. At the market equilibrium price under perfect competition, the consumer surplus in this market equals:
A) total consumer expenditures. B) total sales revenue. C) zero. D) an amount slightly more than total consumer expenditure.
Figure 4-5
If the suppliers of a good will sell any amount at $30 but there are no sales, then the market can best be represented by which graph in Figure 4-5?
a.
1
b.
2
c.
3
d.
4
Producer and consumer surpluses are measures of:
A. industry performance. B. firm conduct. C. market structure. D. None of the answers are correct.