Industry X,which Is Perfectly Competitive,is in Long-Run Equilibrium

question 17

Multiple Choice

Industry X,which is perfectly competitive,is in long-run equilibrium.Assume a new law is passed that requires employers in industry X to provide health insurance to previously uninsured employees.As a result of this new requirement we would expect to observe:

• A)a decrease in price and an increase in total output in industry X.
• B)a decrease in price and total output in industry X.
• C)an increase in price and a decrease in total output in industry X.
• D)an increase in price and total output in industry X.

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Definitions:

Advancing Issues

Refers to the number of stocks whose prices have closed higher than they did in the previous trading session, often used as an indicator of market sentiment.

Framing

Decisions are affected by how choices are described, for example, whether uncertainty is posed as potential gains from a low baseline level, or as losses from a higher baseline value.

Potential Gains

The anticipated positive returns from an investment or venture, before accounting for expenses or losses.

Potential Losses

Refers to the maximum amount of money that can be lost in an investment or a portfolio of investments.