If a perfectly competitive firm is producing an output level for which MR equals $5, MC equals $6, and ATC equals $4, the firm
a. is earning a profit but should reduce output.
b. is earning a profit and should increase output.
c. is suffering a loss and should reduce output.
d. is suffering a loss but should increase output.
a. is earning a profit but should reduce output.
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Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
In the monetary small open-economy model with a fixed exchange rate, a temporary decrease in domestic total factor productivity in the absence of any other shocks
A) increases the current account surplus and increases the domestic money supply. B) increases the current account surplus and decreases the domestic money supply. C) increases the domestic money supply and decreases the current account surplus. D) decreases the domestic money supply and decreases the current account surplus.
Refer to the above figure. The equilibrium level of real Gross Domestic Product (GDP) is
A) $6 trillion. B) $7 trillion. C) $12 trillion. D) $20 trillion.
Tying involves a firm
a. colluding with another firm to restrict output and raise prices. b. selling two individual products together for a single price rather than selling each product individually at separate prices. c. temporarily cutting the price of its product to drive a competitor out of the market. d. requiring that the firm reselling its product do so at a specified price.