A constant-cost industry is one in which:
A. resource prices fall as output is increased.
B. resource prices rise as output is increased.
C. resource prices remain unchanged as output is increased.
D. small and large levels of output entail the same total costs.
Answer: C
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A monopolist that price discriminates
a. produces too much output to be efficient b. produces too little output to be efficient c. produces the efficient level of output d. charges a price equal to its marginal cost e. faces an upward sloping demand curve
Which statement is FALSE?
A. Wages are not downwardly flexible. B. The rational expectations theorists argue that there is a natural level of real GDP toward which the economy gravitates. C. The rational expectations theorists believe anti-recession policies have no effect, but admit anti-inflationary policies may be wise. D. The rational expectations theorists believe that aggregate supply is the prime economic mover.