A situation in which firms choose their best strategy given the strategies chosen by the other firms in the market is called
a. a competitive equilibrium.
b. an open-market solution.
c. a socially-optimal solution.
d. a Nash equilibrium.
d
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The short-run average total cost, average variable cost, and marginal cost curves are all U-shaped because of
i. constant total fixed cost. ii. increasing and then decreasing marginal returns as more labor is hired. iii. economies and diseconomies of scale as the plant size increases. A) only i B) only ii C) i and iii D) ii and iii E) i, ii, and iii
If the market in the figure above is a profit-maximizing single-price monopoly, consumer surplus is the area ________
A) ABH B) BFGH C) ACG D) BCD E) ACE
Using aggregate demand and aggregate supply, explain what happens in the short run if the Federal Reserve raises interest rates in the economy. Be sure to detail what happens to aggregate demand, the price level, the level of GDP, and unemployment
Assume that the economy is at full employment before the interest rate increase.
A price ceiling set below the equilibrium price causes a shortage in the market
a. True b. False Indicate whether the statement is true or false