If marginal revenue is $8 and marginal costs is $10, the firm should increase its output.
Answer the following statement true (T) or false (F)
False
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Suppose a U.S. government program subsidizes the production of domestic sugar producers and places a tariff (tax) on the importation of sugar from other countries. This program
a. helps the producers of sugar, but increase the opportunity cost of obtaining it. b. promotes the production of goods that consumers value highly relative to cost. c. creates wealth, because the government is providing the subsidies and imposing the tariffs. d. will reduce the opportunity cost of obtaining sugar and therefore lead to lower sugar prices.
If a perfectly competitive firm finds that price is less than average variable cost, it should:
A. increase output until price equals marginal cost. B. decrease output until price equals marginal cost. C. shut down immediately. D. not adjust output if marginal cost equals price.
Using Figure 3 above the distance between what 2 lines illustrate a recessionary output gap?
A. PAE2 to PAE3 B. Y2 to Y3 C. Y1 to Y2 D. PAE1 to PAE2
Exhibit 10A-5 Macro AD-AS Model
?
Economic growth is represented in Exhibit 10A-5 by:
A. ?leftward shift in the long-run aggregate supply curve (LRAS). B. ? inward shift of the production possibilities curve. C. ?rightward shift in the long-run aggregate supply curve (LRAS). D. ?movement along the long-run aggregate supply curve (LRAS).