Learn more about our help with Assignments: Economics
Search & Filtering
Now suppose government expenditure (G) increases and there is an increase in the overall price level (P). By using the IS curve and Fed (Central Bank) Rule curve graph, explain the effect of these changes on the interest rate and output in the Short- Run. Explain each step in your graph.
Suppose there is an increase in interest rate. By using the Aggregate Expenditure (AE) – Aggregate Output (Y) graph, show the effects of this change on AE and Y in the Short-Run. Then, show the effect of increased interest rate by using the IS curve, explain what will happen to the IS curve.
Suppose central bank applies inflation targeting. What would be the central
bank’s interest rate response if there is an increase in output (Y)? Graph the Aggregate demand (AD) curve and explain the shape of the AD curve.
bank’s interest rate response if there is an increase in output (Y)? Graph the Aggregate demand (AD) curve and explain the shape of the AD curve.
Monopolists who rigorously seek to innovate
1) are irrational since they are competing with themselves
2) could be profit maximizing because they expect lower costs by innovation
3) do so out of fear of future competition or they would not innovate
4) do not exist because they have entire market to themselves already
1) are irrational since they are competing with themselves
2) could be profit maximizing because they expect lower costs by innovation
3) do so out of fear of future competition or they would not innovate
4) do not exist because they have entire market to themselves already
If the long-run marginal cost curve is below the marginal revenue curve at the point of output for a monopolist that is making profit, then the firm has:
1) too large a plant size
2) too small a plant size
3) insufficient knowledge about the plant size until it knows it marginal cost
4) insufficient knowledge about the plant size until it knows it’s demand curve
1) too large a plant size
2) too small a plant size
3) insufficient knowledge about the plant size until it knows it marginal cost
4) insufficient knowledge about the plant size until it knows it’s demand curve
A monopolist does not have a typical supply curve because
1) numerous demand curves could have identical marginal revenue at a given point on a monopolists marginal cost
2) a monopolist is not a price taker
3) there is no unique correspondence between price and revenue when the market demand curve shifts
4) all of the above
1) numerous demand curves could have identical marginal revenue at a given point on a monopolists marginal cost
2) a monopolist is not a price taker
3) there is no unique correspondence between price and revenue when the market demand curve shifts
4) all of the above
Which statement is true for the single price monopoly that is operating on the demand curve P=75-5Q at a point where price is R37,50
1) the firm should definitely not lower its price
2) the firm should definitely lower its price
3) if the marginal cost is 0, the firm should definitely increase its price
4) None of the above
1) the firm should definitely not lower its price
2) the firm should definitely lower its price
3) if the marginal cost is 0, the firm should definitely increase its price
4) None of the above
If marginal revenue is shown by the equation MR= 100-10q, what is the corresponding demand curve?
1) p= 100-5Q
2) P= 50-10Q
3) P=100-20Q
4) P=50-50Q
1) p= 100-5Q
2) P= 50-10Q
3) P=100-20Q
4) P=50-50Q
Which statement is true regarding a firm in the long run:
1) firms can be of many different sizes if the long run supply curve is horizontal
2) if economies of scale and diseconomies of scale exist, firms will be of the same size
3) no firms will be making economic profits
4 all of the above
1) firms can be of many different sizes if the long run supply curve is horizontal
2) if economies of scale and diseconomies of scale exist, firms will be of the same size
3) no firms will be making economic profits
4 all of the above
When a profit maximizing firm is at its short run optimum:
1) average cost of the product is at its lowest possible point, whether profit is being made or not
2) the firm will be shut down it its price is less than the average fixed cost
3) the profit per unit of output will be at its maximum possible level
4) none of the above will be tru
1) average cost of the product is at its lowest possible point, whether profit is being made or not
2) the firm will be shut down it its price is less than the average fixed cost
3) the profit per unit of output will be at its maximum possible level
4) none of the above will be tru
