"As the price of gasoline rises, the demand for gasoline will fall." That statement is
What will be an ideal response?
potentially misleading because it substitutes the word demand for quantity demanded.
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A perfectly competitive firm should shut down in the short-run if price falls below the minimum of
A) marginal cost. B) marginal revenue. C) average total cost. D) fixed costs. E) average variable costs.
For a firm in monopolistic competition, selling costs
A) increase costs and reduce profits. B) always increase demand. C) can change the quantity produced and lower the average total cost. D) can lower total cost. E) have no effect on the quantity sold.
When the government makes a firm the exclusive legal provider of a good or service, it grants the firm
A) a network externality. B) a copyright. C) a quota. D) a public franchise.
GDP can be used to measure both short-term changes (i.e., over several months) and long-term changes in economic activity
a. True b. False