Let C = 800 + 0.6y and I = 100. Assume no government or foreign sectors. If investment decreases by 40, the equilibrium output decreases by a total of
A) 800. B) 480. C) 100. D) 25.
C
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Which of the following is ALWAYS true for a perfectly competitive firm?
A) P = MR B) P = ATC C) MR = ATC D) P = AVC
An austerity policy is
A) an increase in the money supply. B) an expenditure reduction and expenditure switching policy. C) an expansionary fiscal policy accompanied by decreases in taxes, increases in expenditures, or both. D) an exchange rate switching policy from a fixed to a flexible exchange rate system. E) None of the above.
When marginal cost is constant and zero, the interdependence between Cournot duopolists causes
A. prices and quantities to be the same as they would be in the monopoly case. B. price to be 1/3 higher and quantity to be 1/3 lower than the corresponding values in the monopoly case. C. price to be 1/3 lower and quantity to be 1/3 higher than the corresponding values in the monopoly case. D. prices and quantities to be the same as they would be in the perfectly competitive case.
Which of the following will likely occur when price floors in agriculture are implemented?
A. Quantity demanded will exceed quantity supplied. B. Quantity supplied will exceed quantity demanded. C. Farmland will be underutilized. D. Supply will decrease.