If a firm's average total cost is less than price where MR = MC
A) the firm should shut down.
B) the firm should cut back on its output to lower its cost.
C) the firm should continue to produce the output it is producing.
D) the firm should raise its price.
Answer: C) the firm should continue to produce the output it is producing.
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There is $5,000,000 of currency in Econland, all held by banks as reserves. The public does not hold any currency. If the banks' desired reserve/deposit ratio is 0.25, then the money supply equals:
A. $20,000,000 B. $10,000,000 C. $6,250,000 D. $5,000,000
Assumptions for economic theories and models should be
A) rejected if they are not totally realistic. B) logical rather than empirically testable. C) simple and reasonable rather than complex. D) maintained until overwhelming evidence to the contrary occurs.
The wealth effect on consumer spending is
A) about the same as the effect on plant and equipment expenditure. B) about the same as the effect on residential construction. C) less than the effect on plant and equipment expenditure. D) larger than the effect on residential construction.
In Brown v. Board of Education, the Supreme Court ruled that segregated facilities were inherently unequal
Indicate whether the statement is true or false