Which of the following would be classified as a government purchase?
a. Social security payments
b. Government purchases of computers
c. Unemployment insurance payments
d. Welfare payments
e. Veterans' Administration payments.
B
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High and variable rates of inflation will
What will be an ideal response?
Since marginal revenue is less than price for a monopolist, a monopolist maximizes profits by equating marginal revenue and marginal cost, not price and marginal cost.
Answer the following statement true (T) or false (F)
You are hired as an economic consultant to The Pampered Pet Shop. The Pampered Pet Shop operates in a perfectly competitive industry. This firm is currently producing at a point where market price equals its marginal cost. The Shop's total revenue exceeds its total variable cost, but is less than its total cost. You should advise the firm to
A. produce in the short run to minimize its loss, but exit the industry in the long run. B. cease production immediately because it is incurring a loss. C. lower its price so that it can sell more units of output. D. raise its price until it breaks even.
Refer to the information given. In the long run, a fall in the price level from 100 to 75 will:
Suppose the full employment level of real output (Q) for a hypothetical economy is $500, the
price level (P) initially is 100, and prices and wages are flexible both upward and downward.
Use the following short-run aggregate supply schedules to answer the question.
A. decrease real output from $500 to $440.
B. increase real output from $500 to $620.
C. change the aggregate supply schedule from (a) to (c) and produce an equilibrium level of
real output of $500.
D. change the aggregate supply schedule from (a) to (b) and produce an equilibrium level of
real output of $500.