In the classical IS-LM/AD-AS model, a beneficial productivity shock would ________ output, ________ the real interest rate, and ________ the price level.
A. increase; decrease; decrease
B. decrease; decrease; increase
C. increase; increase; decrease
D. increase; decrease; increase
Answer: A
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A cartel-like collusive solution can be a Nash equilibrium only in price-setting games with:
a. infinite replications. b. finite replications. c. dominant strategies. d. more than two players.
Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the formAVC = a + bQ + cQ2and obtained the following results. Total fixed cost (TFC) at Straker Industries is $1,000. 
The estimated short-run marginal cost function (SMC) at Straker Industries is:
A. SMC = 43.4 ? 5.6Q + 0.6Q2 B. SMC = 43.4 ? 1.4Q + 0.07Q2 C. SMC = 43.4Q ? 5.6Q2 + 0.6Q3 D. SMC = 43.4Q ? 1.4Q2 + 0.07Q3
Rachel left her job as a graphic artist, where she earned $42,000 per year, to open her own graphic arts firm. Her total costs of the new business include:
A. both the expenses incurred for office space, equipment, and supplies and her forgone salary of $42,000 per year. B. only her forgone salary of $42,000 per year. C. only the expenses incurred for office space, equipment, and supplies. D. neither the expenses incurred for office space, equipment, and supplies nor her forgone salary of $42,000 per year.
A firm could lower prices and still increase revenue if
A. elasticity of demand is equal to zero. B. demand is elastic. C. elasticity of demand is equal to unity. D. demand is inelastic.