For a perfectly competitive firm, the short-run supply curve has an output level that is
A. determined by the lowest point on the average total cost curve.
B. determined by the point at which marginal cost equals marginal revenue.
C. determined by the lowest point on the average variable cost curve.
D. determined by the point at which average variable cost intersects the average total cost curve.
Answer: C
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To increase the money supply, the Federal Reserve could
A) decrease income taxes. B) raise the required reserve ratio. C) raise the discount rate. D) lower transfer payments. E) conduct an open market purchase of Treasury securities.
Everything else held constant, when actual output exceeds the natural rate of output ________ aggregate supply ________
A) short-run; decreases B) short-run; increases C) long-run; increases D) long-run; decreases
The three principal factors that explain why the aggregate demand curve is downward sloping are
a. real wealth holdings, the interest rate, and international trade b. the price level, the interest rate, and economic growth c. the interest rate, the economic growth, and international trade d. cost-pull inflation, demand-pull inflation, and real wealth holdings e. the phases of the business cycle: recession, downturn, and recovery
Which of the following is not an advantage to congestion charges for motorists who wish to drive on busy streets?
a. reduced travel time during peak hours b. reduced need for public transportation c. improved environmental quality d. improved valuation of a common resource