If a firm makes its own inputs rather than buying them, it ________ need to be concerned about the hold-up problem and ________ need to be concerned with contract compliance.
A) does not; does not
B) does; does
C) does; does not
D) does not; does
A) does not; does not
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If production displays economies of scale, the long-run average cost curve is
A) downward sloping. B) below the long-run marginal cost curve. C) upward sloping. D) above the short-run average total cost curve.
At its current level of output, a firm’s average cost is $25 and its marginal cost is $20. If the firm increases output by one unit and marginal cost is $22, average cost will be
A. greater than $25. B. equal to $25. C. less than $25. D. equal to marginal cost.
Which of the following is characteristic of a firm that is a competitive price searcher?
a. The firm faces an upward-sloping demand curve. b. The firm faces an inelastic demand curve. c. The firm faces a horizontal demand curve. d. The firm produces a differentiated product.
The Federal Open Market Committee
a. must submit its policies to the President and Senate for approval. b. operates with almost complete discretion over monetary policy. c. is required to target short-term interest rates in a mechanical way based on an equation that takes into account both price stability and output fluctuations. d. is required to set and publicize targets for money supply growth.