The above diagram shows the cost curves for a perfectly competitive wheat farmer. At what price does the wheat farmer shut down?
What will be an ideal response?
The wheat farmer shuts down if the price is less than the minimum average variable cost. So in the figure, the wheat farmer shuts down if the price is less than $2 per bushel.
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The marginal product of a country's workers increases during summer due to the pleasant weather. Which of the following is likely to happen in this case, assuming all else equal?
A) The country's labor demand curve will shift to the left in summer. B) There will be a downward movement along the labor demand curve. C) There will be an upward movement along the labor demand curve. D) The country's labor demand curve will shift to the right in summer.
An expansionary fiscal policy:
a. may include reductions in taxes. b. may include discretionary increases in transfer payments. c. may include increases in government spending. d. All of the answers are correct.
Proponents of deficit reduction argue that the principal effect will be an
A. outward shift of the aggregate supply curve. B. inward shift of the aggregate supply curve. C. outward shift of the aggregate demand curve. D. inward shift of the aggregate demand curve.
Suppose 20 percent of the families receive 20 percent of the income, 40 percent of the families receive 40 percent of the income, and so forth. The Lorenz curve would be
A. the most bowed curve possible. B. the horizontal axis. C. a straight line at a 30-degree angle from the origin. D. a straight line at a 45-degree angle from the origin.