At the profit-maximizing output level, an increase in price by a perfectly competitive firm will:
a. cause an increase in profits.
b. reduce total cost more than total revenue.
c. increase total revenue more than total cost.
d. increase total cost more than total revenue.
e. cause the firm to lose all of its sales.
e
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
If a 10 percent rise in the price of bananas leads to a 20 percent reduction in the quantity of bananas demanded, then the price elasticity of demand is 2.00
a. True b. False
The article on China's $4 trillion of reserves indicates that the yuan's depreciation is due to
A. Intervention of the U.S. government to cause the dollar to depreciate. B. Intervention of the Chinese government to purchase dollars to suppress the yuan. C. Intervention of the Chinese government into the exchange markets to purchase yuan. D. Intervention on the part of the U.S. government to devalue the yuan.
In the market for domestic avocados, what would happen to the market clearing price and the equilibrium quantity if there was a drought in avocado growing areas?
A) The market clearing price would rise, and the equilibrium quantity would rise. B) The market clearing price would fall, and the equilibrium quantity would rise. C) The market clearing price would rise, and the equilibrium quantity would fall. D) The market clearing price would fall, and the equilibrium quantity would fall.