Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $8.00; AVC = $5.00; MC = $8.00; MR = $7.00. The firm should
A. increase price.
B. continue to produce its current output.
C. increase output.
D. decrease output.
Answer: D
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Which of the following statements is true?
a. The national debt is the current year's amount by which the government is spending more than it collects as taxes. b. Deficits are financed by the government issuing for sale more government securities. c. The debt ceiling refers to the amount of debt at which the government is officially declared as being bankrupt. d. Internal national debt is the portion of the national debt owed to foreigners.
Suppose the federal funds rate is 5 percent. If the Fed decides to increase the target for the federal funds rate from 5 percent to 6 percent, it could take:
A. an offensive action and reduce reserve requirements. B. an offensive action and raise reserve requirements. C. a defensive action and raise reserve requirements. D. a defensive action and reduce reserve requirements.
The Fed can change the equilibrium rate of interest by changing
A. Taxes. B. Government spending. C. Tariffs. D. Reserve requirements or the discount rate, or through open market operations.
Liability rules are laws that require party A to compensate party B for damages imposed.
Answer the following statement true (T) or false (F)