Suppose the Economy Is Initially in Long-Run Equilibrium

question 79

Multiple Choice

Suppose the economy is initially in long-run equilibrium.Which of the following events leads to a decrease in the price level and real GDP in the short run?

• A)a decrease in health insurance premiums paid by firms raises the cost of employing labor
• B)an increase in government transfer payments
• C)an increase in the cost of a key input such as oil
• D)a sharp fall in stock market prices

Evaluate the significance of economies of scale in the formation and sustainability of monopolies.

Understand the concept of monopolies and how they differ from perfect competition.

Analyze the effects of monopolies on consumer surplus, producer surplus, and overall welfare.

Understand how monopolists determine production levels and pricing.

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Definitions:

Socially Skilled

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A state of well-being in which an individual realizes their own abilities, can cope with normal stresses of life, can work productively, and can contribute to their community.

Popular

Widely liked or appreciated by many people.

Socially Skilled

Possesses the abilities necessary for successful social interactions, including effective communication, empathy, and understanding social cues.