According to the graph shown, if a firm is producing at Q3:
This graph represents the cost and revenue curves of a firm in a perfectly competitive market.
A. profits are being maximized.
B. average total costs exceed the market price.
C. the firm should expand production.
D. marginal revenue is greater than marginal cost.
B. average total costs exceed the market price.
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Which statement best characterizes the classical economists' view of saving and investment?
A) Saving exceeds investment. B) Saving is less than investment. C) Saving equals investment. D) Saving and investment are not related to one another.
In the IS model, assuming that the real interest rate does not change, an increase in autonomous net exports causes total investment, planned plus unplanned, to ________
A) fall, then rise back to its initial level B) fall, then rise above its initial level C) rise, then fall back to its initial level D) all of the above E) none of the above
In the long run, if ATC equals price at the output level where MC = MR then:
A) new firms may be incentivized to enter the industry. B) the firm will shut down. C) the firm will earn a normal profit. D) the firm may be able to minimize losses.
Which of the following is a useful metaphor for the role of prices in markets?
A) Cardiovascular system B) Digestive system C) Vision system D) Nervous system