An increasing-cost industry is the result of:
A. higher resource prices that occur as the industry expands.
B. a change in the industry's minimum efficient scale.
C. X-inefficiency.
D. the law of diminishing returns.
Answer: A
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If there is no Ricardo-Barro effect, a government budget deficit will ________ the equilibrium real interest rate and ________ the equilibrium quantity of investment
A) raise; decrease B) raise; increase C) lower; increase D) not change; not change E) lower; decrease
The above figure shows the apartment rental market in Bigtown. If the market is in equilibrium and then the Bigtown Housing Authority imposes a rent ceiling of $500 per apartment, which of the following would occur?
A) a decrease in the search time and expense of finding an apartment B) an increase in the search time and expense of finding an apartment C) an increase in producer surplus but a decrease in consumer surplus D) an increase in efficiency