Lizzie's budget line is shown in the figure above. If the price of a magazine falls, the budget line
A) shifts rightward and its slope does not change.
B) shifts leftward and its slope does not change.
C) becomes flatter.
D) becomes steeper.
C
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If price = marginal cost at the output produced by a perfectly competitive firm and the firm is earning an economic profit, then
A) marginal revenue is less than price. B) price exceeds average total cost. C) total revenue equals total cost. D) average total cost is at a minimum.
Agreements to abolish most barriers to trade among nations are known as:
a. free trade cartels. b. discriminatory trade agreements. c. neutral trade agreements. d. preferential trade agreements. e. retaliatory trade agreements.
The long-run average cost curve is tangent to the short-run average total cost curve at the minimum point of the short-run average total cost curve when the:
A. firm is experiencing constant returns to scale. B. firm is experiencing economies of scale. C. long-run average cost curve is upward-sloping. D. long-run average cost curve is downward-sloping.
Figure 14-6
In the situation shown in , how could the Fed return the economy to potential output?
a.
decrease government spending
b.
increase taxes
c.
decrease taxes
d.
shift to a more restrictive monetary policy
e.
shift to a more expansionary monetary policy