If total variable cost exceeds total revenue at all output levels, a perfectly competitive firm
A) has covered its fixed cost. B) should produce in the short run.
C) should shut down in the short run. D) is making short-run profits.
C
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The new Keynesian economists argue that prices are relatively rigid because of
A) menu costs. B) overlapping staggered contracts. C) efficiency wages. D) All of the above.
All or part of a firm's profits may be paid out to the firm's stockholders in the form of
a. retained earnings. b. dividends. c. interest payments. d. capital accounts.
Joe and Steve are duopolists who each can follow two strategies: cooperate and jointly act like a monopolist, or don't cooperate (cheat) and act like duopolists. Their profits are as follows:
What will they do?
What will be an ideal response?
In the classical model, a temporary increase in government purchases causes the new equilibrium to have
A. more employment and a lower real wage than before. B. less employment and a higher real wage than before. C. more employment and a higher real wage than before. D. less employment and a lower real wage than before.