(1)(2)(3)(4)(5)QdQdPriceQsQs5040$1070806050960708060850609070740501008063040Refer to the above table. If demand is represented by columns (3) and (1) and supply is represented by columns (3) and (4), equilibrium price and quantity will be:
A. $7 and 30 units.
B. $9 and 60 units.
C. $10 and 60 units.
D. $8 and 80 units.
Answer: B
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In a perfectly competitive market that is in long-run equilibrium, a permanent leftward shift in the market demand curve
A) raises the price in the short run. B) raises profits in the short run. C) leads to new firms entering the market in the long run. D) lowers the price at first but then raises it as firms leave the market.
If a firm’s average cost is currently $150, and the marginal cost is $195, then the average cost is rising.
Answer the following statement true (T) or false (F)
The main policy conclusion of the rational expectations theory is
a. fiscal policy lags are so long and variable that such policy is worthless, but monetary policy can stimulate output. b. monetary policy lags are so long and variable that such policy is worthless, but fiscal policy can stimulate output. c. both monetary and fiscal policy will affect real output if firms and households correctly anticipate the effects of changes in government policy. d. neither monetary nor fiscal policy will affect real output if firms and households correctly anticipate the effects of changes in government policy.
A firm is currently operating where the MC of the last unit produced is $84, and the MR of this unit is $70 . What would you advise this firm to do?
a. Shut down. b. Increase output. c. Stay at its current output. d. Decrease output. e. Decrease price.