Starting from an initial long-run equilibrium, under the rational expectations hypothesis, an anticipated shift to a more expansionary policy will increase
a. prices but not real output in the short run.
b. real output but not prices in the short run.
c. real output in the long run but not in the short run.
d. real output in both the long run and the short run.
A
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Suppose that a technological advancement substantially reduces the cost of laser eye surgery. This would cause the equilibrium
A) quantity of laser eye surgery to decrease. B) quantity of laser eye surgery to increase. C) price of technology to increase. D) quantity of technology to decrease.
With perfect price discrimination ________, and production is expanded until marginal revenue equals ________
A) the firm's demand curve becomes its marginal revenue curve; marginal cost B) the firm's demand curve becomes its marginal revenue curve; average total cost C) the firm's marginal revenue curve bisects the angle with which demand intersects the price-axis; marginal cost D) the firm's marginal revenue curve bisects the angle with which demand intersects the price-axis; average total cost E) economic profit is maximized when the lowest price equals marginal cost; average total cost.