What are menu costs?
A) the cost to a household of borrowing money when there is deflation
B) the opportunity cost of dining in a restaurant instead of at home
C) the costs to a firm of changing prices
D) the full list of a firm's costs of production
C
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If increasing the utility of the transfer recipient is the only criterion cared about, then _____
a. a cash payment will usual be preferred to an in-kind payment b. an in-kind payment will usually be preferred to a cash payment c. a cash payment and in-kind payment are always equal d. an in-kind payment will always be preferred to a cash payment
If the Japanese economy is currently suffering from a recession we should expect U.S. exports to Japan to
a. decrease. b. increase. c. remain the same. d. increase only if the Japanese Yen depreciates.
Programs that automatically increase government spending (relative to revenue) during a recession and automatically decrease government spending (relative to revenue) during an economic boom are called:
A. discretionary fiscal policy. B. supply-side programs. C. automatic stabilizers. D. tax credits.
Refer to the above figure. In order to stay open in the short run, this firm must
A. earn a positive profit. B. recover its fixed cost. C. receive a price exactly equal to its average total cost. D. receive a price equal to or greater than the minimum of its average variable cost.