If a perfectly competitive firm produces and sells more output, its _______ will definitely increase.
a) Marginal revenue
b) Total profit
c) Average total cost
d) Total revenue
Answer: d) Total revenue
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Monopolistically competitive firms face downward sloping residual demand curves because these firms
A) have relatively few rivals (compared to competition). B) sell differentiated products. C) A and/or B. D) None of the above.
The time needed to decide what to do once a macroeconomic problem has been identified is called a ________ ________
a. Recognition Lag b. Decision-Making Lag c. Implementation Lag d. Effectiveness Lag
Use the following diagram to answer the next question.
Assume the economy is initially on aggregate demand AD2. The Fed should ________.
A. raise the discount rate B. buy bonds C. lower the prime rate D. increase the reserve requirement
An increase in demand and a decrease in supply, will lead to a(n) ________ in equilibrium quantity and a(n) ________ in equilibrium price.
A) decrease; decrease B) indeterminate change; increase C) indeterminate change; decrease D) increase; indeterminate change