Answer the following questions true (T) or false (F)
1. If a perfectly competitive firm maximizes short-run profits, its marginal revenue will be positive and less than its price.
2. A profit-maximizing monopolistically competitive firm produces and sells an allocatively efficient quantity of output.
3. Unlike a perfectly competitive firm, a monopolistic competitor does not have a short-run shut-down point.
1. TRUE
2. FALSE
3. FALSE
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The intertemporal budget constraint is defined as:
A) DP + DF/(1 + r) = QP + QF/(1 + r) B) V = QP + QF/(1 + r) C) V = DP + DF/(1 + r) D) DF + DP/(1 + r) = QF + QP/(1 + r) E) DP + DF(1 + r) = QP + QF(1 + r)
If government purchases increase and net taxes decrease, _____
a. the price level will fall b. money supply must rise c. the aggregate demand curve shifts leftward d. aggregate supply shifts rightward e. output and employment will increase
Which of the following is true of investment spending? a. It depends on perceptions about future economic conditions
b. It increases as the current level of real gross domestic product increases. c. As the expected rate of return on investment spending decreases, the investment spending function shifts upward. d. As the real interest rate decreases, the investment spending function shifts downward.
Rent control is a price _____.
Fill in the blank(s) with the appropriate word(s).