What is the relationship between a firm's supply curve, its marginal cost curve, and its average variable cost curve?
What will be an ideal response?
The firm will produce output as long as the price is greater than the minimum AVC. It will choose the level of output where MC = P, which means the firm's supply curve is the firm's MC curve above minimum AVC and along the vertical axis, producing zero, below the minimum AVC.
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One way to estimate GDP is to:
A. add together the market value of only final goods sold in the economy and not services. B. measure the total expenditure of an economy. C. add together the market value of only final services sold in the economy. D. add up all the money people spend buying final and intermediate goods and services.
When the Fed wants to expand the money supply, it
A. buys government securities. B. sells government securities. C. buys common stock. D. sells common stock.
Cashing out capital gains in Virtual Currency System #3 (i.e., turning virtual capital gains into real world currencies) causes the nation's:
a. Monetary base to remain the same. b. M2 money supply to fall. c. M2 money multiplier to fall. d. M2 money supply to rise.
If the opportunity cost of producing a good domestically exceeds the opportunity cost of purchasing it on the world market, a country can gain by
A. decreasing production and increasing exports. B. increasing production and decreasing exports. C. increasing production and decreasing imports. D. decreasing production and increasing imports.