If price is less than the average variable cost, firms that seek to maximize profit should shut down
a. True
b. False
Indicate whether the statement is true or false
True
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Financial markets pay close attention to changes in the federal funds rate because these changes ________.
A. directly affect the interest payments on the national debt B. affect other interest rates in the economy C. directly affect a large volume of loans D. indicate commercial bank lending policies
How much is autonomous consumption when disposable income is $800 billion?
A. 0
B. $200 billion
C. $400 billion
D. $600 billion
What does the Consumer Price Index (CPI) measure?
A. prices of durable goods B. prices of nondurable goods C. the cost of living over time D. the cost of replacing lost items
The law of diminishing marginal product states that
A) output will continue to increase indefinitely if more variable factors of production are added to an existing stock of fixed factors. B) successive equal-sized increases in labor, when added to fixed factors of production, will result in smaller increases of output. C) a doubling all inputs will double output. D) variable costs tend to decrease with output.