Kevin's Golf-a-Rama sells golf balls in a perfectly competitive market. At its current level of golf ball production, Kevin has marginal costs equal to $1, and AVC is rising. If the market price of golf balls is $2, Kevin should:
A. decrease the level of golf ball production.
B. continue producing the current level of production.
C. increase the production of golf balls.
D. shut down and produce no golf balls.
Answer: C
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Answer the following statement true (T) or false (F)
The government of a country decides it long-run exchange rate and intervenes regularly in the foreign exchange market to keep the exchange rate at its fixed level. The country is most likely to have a ________
A) fixed exchange rate system B) dirty-float exchange rate system C) real exchange rate system D) floating exchange rate system
Refer to Figure 11.1. Assume the economy is in equilibrium at 1 = 0. Other things equal, a decrease in the growth rate of productivity will result in a movement from point ________ to point ________
A) A; B B) B; A C) A; C D) A; D
The welfare loss of a tariff equals that of a import quota that leads to the same level of imports
Indicate whether the statement is true or false