In the short run, perfectly competitive firms will determine whether to continue producing the current output, reduce output, or increase output based on the relationship between
A. price and average cost.
B. price and marginal cost.
C. marginal revenue and average cost.
D. average revenue and average cost.
Answer: B
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Clarity Dence pays $375 for a used acoustic guitar from the local music instrument dealer. The dealer himself purchased it for $150. In principle, how would this exchange affect GDP?
A) Nothing happens to GDP, because the guitar is a used good. B) GDP increases by $150. C) GDP increases by $225. D) GDP increases by $375. E) GDP increases by $525.
All of the following would show a more equal distribution than the distribution of money income EXCEPT
A) total income. B) after-tax income. C) wealth. D) lifetime earnings.
. Central banks, as they conduct monetary policy, inevitably affect only ___________, with no lasting impact on ___________ in the long run.
A. prices; employment B. employment; prices C. output; prices D. demand; employment
Which of the following is usually a durable good?
A. A unit of labor B. The interest rate C. A depletable resource D. A capital good