A perfectly competitive firm will produce at an economic loss in the short run rather than discontinue production if there is a rate of output at which
a. marginal revenue equals marginal cost
b. total revenue equals total cost
c. total revenue exceeds total cost
d. total revenue exceeds total fixed cost
e. total revenue exceeds total variable cost
E
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Given an upward sloping supply curve, the more inelastic is demand, the greater the fraction of the burden of taxation that is borne by consumers
a. True b. False Indicate whether the statement is true or false
The U.S. military defends Jacob from foreign attackers. The fact that Jacob enjoys this protection does not detract from others Americans' enjoyment of it. For this reason, we say that national defense is
a. excludable. b. not excludable. c. rival in consumption. d. not rival in consumption.
The output effect of an increase in the wage comes about because higher wages:
A. increase production costs, and final good prices will rise, reducing the quantity demanded of the product. B. increase production costs, and final good prices will rise, increasing the quantity demanded of the product. C. make labor less expensive as an input, leading firms to switch to labor as an input. D. make labor more expensive as an input, leading firms to switch to other inputs.
An increase in investment and government spending can be expected to shift the:
A. Aggregate expenditures curve downward and the aggregate demand curve leftward B. Aggregate expenditures curve upward and the aggregate demand curve leftward C. Aggregate expenditures curve downward and the aggregate demand curve rightward D. Aggregate expenditures curve upward and the aggregate demand curve rightward