The theory underlying demand and supply curves assumes that, all other things unchanged, the primary variable that assures the equality of the quantities demanded and supplied is:
A) consumer income.
B) the preferences of consumers.
C) the expectations of consumers and producers.
D) price.
Ans: D) price.
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A company could produce 100 units of a good for $320 or produce 101 units of the same good for $324. The $4 difference in costs is
A) the marginal benefit of producing the 101st unit. B) the marginal cost of producing the 101st unit. C) both the marginal benefit and the marginal cost of producing the 101st unit. D) neither the marginal benefit nor the marginal cost of producing the 101st unit.
A supply shock causes the long-run aggregate supply curve to shift left, decreasing the price level
Indicate whether the statement is true or false
If a firm wished to maximize total revenues it should produce where
a. marginal cost is zero. b. marginal revenue is zero. c. marginal revenue is equal to marginal cost. d. marginal revenue is equal to price.
What does a bank do when they have excess reserves?