A perfectly competitive firm producing 100 units of output per period finds that: Average total cost is $20; Average variable cost is $12; Marginal cost is $18 and increasing; Price of the product is $15. This firm should
a. produce more output
b. raise the price of its product
c. reduce production without shutting down
d. shut down (reduce output to zero)
e. do nothing (it is currently maximizing profit)
C
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A rent ceiling set below the equilibrium rent decreases the quantity of housing supplied because
A) landlords of previously barely profitable apartments refuse to rent them. B) the supply of housing increases. C) fewer tenants will search for housing. D) demand for housing will increase. E) the supply curve of housing immediately shifts leftward.
The Federal Reserve System
A) regulates the nation's financial institutions. B) conducts the nation's monetary policy. C) Both answers A and B are correct. D) Neither answer A nor B is correct.
In the Keynesian model, changes in aggregate supply
a. are the primary determinant of inflation. b. could only destabilize the economy. c. are ignored. d. None of the above
Inflation refers to a one-time price increase in a particular market
a. True b. False Indicate whether the statement is true or false