Use the following graph to answer the next question.
The graph shows the cost curves for a perfectly competitive firm. If the market price of the product is $1.25 per unit, then the firm will produce how many units to maximize profits in the short run?
A. 15
B. 20
C. 0
D. 35
Answer: B
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Which of the following is likely to happen if consumption in an economy falls?
A) Asset prices rise. B) Mortgage defaults fall. C) Labor supply falls. D) Layoffs rise.
Sun City's public bus line has been operating at a deficit. The city decides to raise the fare from 50 cents to 75 cents, anticipating enough additional revenue to cover the deficit. What assumption is the city making about price elasticity?
A recessionary gap occurs in the economy when
A) Aggregate demand is in the depression or Keynesian range of the aggregate supply curve. B) Aggregate demand is less than potential GDP. C) Aggregate demand is less than full employment output. D) None of the above.
All government payments to individuals are called transfer payments.
Answer the following statement true (T) or false (F)