To minimize total costs for a particular rate of output, a firm will equate
A) the average cost of each factor.
B) the marginal revenue of each factor.
C) the marginal physical product per dollar spent on each factor.
D) the marginal revenue product and variable marginal revenue for each factor.
C
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In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is an inferior good
a. The population increases and productivity increases. b. Income increases and the price of inputs decrease. c. The number of firms in the market decreases and income increases. d. Consumer preference increases and the price of a complement decreases. e. The price of a substitute in consumption decreases and the price of a substitute in production decreases.
"Market power" refers to a firm's ability to:
A. influence the price its competitors charge. B. raise its price without losing all of its sales. C. undercut its competitors' prices. D. force consumers to buy high-priced products.
If the economy's full-employment output is $12 trillion, actual output is $10 trillion, and the budget deficit is $2 trillion, the deficit in this case is known as a
A. natural employment deficit. B. cyclical deficit. C. debt deficit. D. structural deficit.
In the diagram, the economy's relevant aggregate demand and immediate-short-run aggregate supply curves, respectively, are lines:
A. 4 and 3.
B. 4 and 1.
C. 2 and 4.
D. 2 and 3.