In a two-period model with production, an anticipated future increase in domestic total factor productivity
A) increases domestic output and increases the current account surplus.
B) increases domestic output and decreases the current account surplus.
C) has no effect on domestic output and increases the current account surplus.
D) has no effect on domestic output and decreases the current account surplus.
D
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Suppose a negative technological change in the production of disease-resistant wheat caused the price of wheat to rise. Holding everything else constant, how would this affect the market for corn (a substitute for wheat)?
A) The supply of corn would decrease and the equilibrium price of corn would increase. B) The demand for corn would increase and the equilibrium price of corn would increase. C) The demand for corn would increase and the equilibrium price of corn would decrease. D) The demand for corn would decrease because consumers could afford to buy less wheat and corn.
Which of the following is a characteristic of a monopoly?
a. rising average total costs b. one buyer c. rising fixed costs d. a product without close substitutes