If muffins and bagels are substitutes, a higher price for bagels would result in a(n)
a. increase in the demand for bagels.
b. decrease in the demand for bagels.
c. increase in the demand for muffins.
d. decrease in the demand for muffins.
c
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Under the rational expectations hypothesis, if wages adjust rapidly to new information about intended policy actions, monetary policy can have an effect
A) in the long run, but not the short run. B) only in the short run and only if the policy is unanticipated. C) in both the short and the long run. D) only in the long run and only if the policy is fully anticipated.
When price is greater than marginal cost for a firm in a competitive market,
a. marginal cost must be falling. b. the firm must be minimizing its losses. c. there are opportunities to increase profit by increasing production. d. the firm should decrease output to maximize profit.