A perfectly competitive firm is currently producing at a point where price is $10 and both marginal cost and average variable cost are $7. To maximize profit or minimize loss in the short run, this firm should:
a. ?shut down.
b. ?increase its output.
c. ?raise its price.
d. ?reduce its output.
e. ?lower its price.
Answer: b. ?increase its output.
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Which one of the following is not a danger of experimenting with pricing for an oligopoly?
A. Firms matching price reductions. B. The uncertainty of competitor response. C. Product differentiation. D. Retaliation.
The slope of a curved line can be approximated by
A) the average of the variable measured along the y-axis divided by the average of the variable measured along the x-axis. B) the inverse of the straight-line method. C) the average of the variable measured along the x-axis divided by the average of the variable measured along the y-axis. D) the slope across an arc from one point on the curve to another point on the curve.
Why does continued foreign investment in U.S. stocks and bonds and foreign companies continuing to build factories in the United States result in a current account deficit in the United States?
What will be an ideal response?
According to Alan Greenspan, the type of inflation that the Taylor Rule is best at addressing is
A) asset-price inflation B) product-price inflation C) both asset-price and product-price inflation D) demand-induced-one-shot inflation E) supply-induced one-shot inflation