The marginal cost curve of a firm above AVC is also its short-run supply curve.
Answer the following statement true (T) or false (F)
True
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
If you want to know the present value of $4,000 in two years and the annual interest rate is 5%, what formula can you use?
A) Present value = $4,000 / (0.05 ) × 2. B) Present value = $4,000 / (1 + 0.05 )2. C) Present value = $4,000 × (1 + 0.05 )2. D) Present value = $4,000 × (1 + 0.05 )/ 2.
Refer to the accompanying graph. If this firm is a price taker, then when the price of each unit of output is $30, this firm's total cost at its profit-maximizing level of output is ________.
A. $2,700 B. $1,200 C. $900 D. $1,600
Which is not characteristic of a product with relatively inelastic demand?
A. The good is regarded by consumers as a necessity. B. Buyers spend a small percentage of their total income on the product. C. Consumers have had only a short time period to adjust to changes in price. D. There are a large number of good substitutes for the good.