A new government policy successfully lowers firms unit costs. What are the short-run and the long-run effects

Question:

A new government policy successfully lowers firms’ unit costs. What are the short-run and the long-run effects of such a policy? (Assume that full employment output does not change.)

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Macroeconomics Principles and Applications

ISBN: 978-1111822354

6th edition

Authors: Robert E. Hall, Marc Lieberman

See More Books

Question Posted: Jun 09, 2018 08:39 AM

See More Questions

A sales tax of 10% is placed on half the firms (the polluters) in a competitive industry. The revenue is paid to the remaining firms (the non polluters) as a 10% subsidy on the value of output sold....
The 2010 oil spill in the Gulf of Mexico caused the oil firm BP and the U. S. government to greatly increase purchases of boat services, various oil-absorbing materials, and other goods and services...
Business Taxes: In this exercise, suppose that your hamburger business McWendys has a homothetic decreasing returns to scale production function that uses labor and capital k to produce hamburgers x...
Josie's new job has a yearly salary of $42,000. Her salary will increase by $4000 each year thereafter. If Josie works for at this job for 30 years how much will she have been paid total over the 30...
Barry's Tire Service completed 100 tire changes, six brake jobs, and 16 alignments in an eight-hour day with his standard crew of six mechanics. A brake specialist costs $16 per hour, a tire changer...
A force of F = 100 lb holds the 400-lb crate in equilibrium. Determine the coordinates (0, y, z) of point A if the tension in cords AC and AB is 700 lbeach. T 401 -Sa B
In Problem 2.4 you were asked to compute a $95 %$ CI on mean gasoline prediction interval on mileage when the engine displacement $x_{1}=275$ in. $^{3}$ Compare the lengths of these intervals to the...
Forecasting with the Parsimonious Method and Estimating Share Value Using the ROPI Model Following are income statements and balance sheets for Cisco Systems. Cisco Systems Consolidated Statements of...
[The following information applies to the questions displayed below.] Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as...
A highly viscous liquid discharges from a large container through a small-diameter tube in laminar flow. Disregarding entrance effects and velocity heads, obtain a relation for the variation of fluid...
Use an AD and AS graph to explain the short-run and long-run effects on real GDP and the price level of an increase in autonomous consumption spending. Assume the economy begins at full employment.
In 1991, the Fed lowered its interest rate target, helping to bring the recession of that year to a rapid end. Make two copies of Figure 14(a) on a sheet of paper. Add curves to illustrate your...
A rock dropped from a cliff falls one-third of its total distance to the ground in the last second of its fall. How high is the cliff?
A car airbag contains the compound NaN3. When the car decelerates quickly, heat from an electric current causes the NaN3 to decompose into sodium metal and nitrogen gas. If 56 g of nitrogen gas is...
You measure a watch's hour and minute hands to be 8.15 mm and 11.1 mm long, respectively. In one day, by how much does the distance traveled by the tip of the minute hand exceed the distance traveled...
Jennifer, who has a mass of 50.0 kg, is riding at 35.0 m/s in her red sports car when she must suddenly slam on the brakes to avoid hitting a deer crossing the road. She strikes the air bag, that...
A restrict voting rights provision is usef to: A ) prevent current shareholders from voting in special board elections B ) giveshareholders of a target firm the right to buy shares in a company at a...
Starting from your campsite you walk 3 . 0 km east, 3 . 0 km north, 2 . 0 km east, and then 1 . 0 km west. What is your final distance from the campsite?
If an ultraviolet photon is to dissociate the oxygen and carbon atoms in the carbon monoxide molecule, it must provide 11 eV of energy. What is the minimum frequency of the appropriate radiation?
Comptech Ltd is a manufacturer of optical equipment. In September 2019, Ed Thompson the Chief Research Officer, attended a conference in Switzerland that focused on optical developments for the 21st...
In Figures, we assumed that the world price of a good was fixed, and not affected by the quantity of imports a country chooses. But if a country is large relative to the world market, its imports can...
A function is given. r(t) = 5 - t; t = 5, t = 10 (a) Determine the net change between the given values of the variable. (b) Determine the average rate of change between the given values of the...
Why are certain functional dependencies called trivial functional dependencies? Explain what is meant by repetition of information and inability to represent information. Explain why each of these...
When is a table in BCNF? Explain what this means and provide a specific example? What is a surrogate key, and when should you use one? Give specific examples ? What is normalization? Why is it...

A new government policy successfully lowers firms unit costs. What are the short-run and the long-run effects

Question:

Step by Step Answer:

In the short run unit costs decrease and the AS curve shifts ...View the full answer

Macroeconomics Principles and Applications

Students also viewed these Business questions