You're called in as a consultant: Price is $24 . At a production level of 200 units, MC = MR, AFC = $6, and AVC = $16 . What do you advise this firm to do?
a. Increase output.
b. Decrease output.
c. Shut down operations.
d. Stay at 200 units; the firm is earning $400 profit.
e. Stay at 200 units; the firm is minimizing losses of $200.
D
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A decrease in the price of a good will cause a movement along the demand schedule to a higher quantity demanded.
Answer the following statement true (T) or false (F)
In the new classical model, stabilization policies
a. cannot affect output and employment in either the short run or the long run. b. affect output and employment only in the short run. c. have no effect on output and employment, even in the short run. d. affect output and employment only in the long run.
An economist from which school of thought would most likely accept the following- "The wide acceptance and practice of activist government fiscal policy."
a. Traditional classical economics b. Neoclassical economics c. Marxist economics d. New monetarist economics e. Keynesian economics
The production possibilities curve can shift inward when
A) production increases. B) employment increases. C) the stock of productive capital rises. D) a country experiences a natural disaster.