If MR=MC and P>AVC, the firm should produce
A. at this quantity.
B. zero.
C. fewer than this quantity.
D. more than this quantity.
Answer: A
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An upward-sloping Engel curve indicates that
a. the good is normal. b. the good is inferior. c. demand for this good is elastic. d. demand for this good is inelastic.
An economy produces only 1,000,000 computers valued at $2,000 each. Of these, 200,000 are sold to consumers, 300,000 are sold to businesses, 300,000 are sold to the government, and 100,000 are sold abroad. No computers are imported. At the end of the year, the computer manufacturers hold the unsold computers in inventory. What is the value of GDP?
A. $2.0 billion B. $0.9 billion C. $1.0 billion D. $1.8 billion
When comparing the annual inflation rate in the United States based on the CPI with the annual inflation rate based on the PCE price index, the data show that the
A) CPI measure tends to exceed the PCE price index measure. B) PCE price index measure tends to exceed the CPI measure. C) CPI measure and the PCE price index measure are equal. D) CPI measure and PCE price index measure move in opposite directions. E) CPI deflator and PCE price index cannot be compared because they measure prices of different baskets of goods and services.
Increasing the amount of information available to investors helps to reduce the problems of ________ and ________ in the financial markets
A) adverse selection; moral hazard B) adverse selection; risk sharing C) moral hazard; transactions costs D) adverse selection; economies of scale