Tight monetary policy will ________ net exports as a result of a ________ currency.
A. decrease; stronger
B. increase; weaker
C. increase; stronger
D. decrease; weaker
Answer: A
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As we move along a planned expenditures line
A) price level falls. B) price level fluctuates depending on whether the economy is expanding or contracting. C) price level rises. D) price level is held constant.
A monopolistically competitive firm maximizes profits when it
A) produces the quantity at which marginal cost equals the market price. B) produces the quantity at which marginal cost equals marginal revenue and uses the demand curve to determine the market price. C) produces the quantity at which marginal cost equals marginal revenue and sets the price equal to the marginal cost. D) produces the quantity at which marginal cost equals marginal revenue and sets the price equal to the marginal revenue.
Suppose the market demand function for ice cream is Qd = 10 - 2P and the market supply function for ice cream is Qs = 4P - 2, both measured in millions of gallons of ice cream per year. Suppose the government imposes a $0.50 tax on each gallon of ice cream. The consumer surplus with the tax is:
A. $166,667. B. $3.56 million. C. $7.11 million. D. $9 million.
Fixed costs are defined as
a. the total costs of a firm's production b. the additional cost of the last unit produced c. costs that increase proportionately as the quantity produced increases d. costs that do not vary as quantity produced increases e. implicit costs only