The optimal level of resource use comes when
a. MRP exceeds input price.
b. MRP is less than input price.
c. MRP equals input price.
d. use of the resource exhausts the producer's funds.
C
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If a $2 billion increase in investment brings about a $5 billion increase in equilibrium expenditure, we know that the multiplier equals
A) 4. B) 3. C) 10. D) 5. E) 2.5.
Natural monopolies are firms that
a. have a downward-sloping long-run average cost curve over the entire range of market demand b. have an upward-sloping long-run average cost curve over the entire range of market demand c. are protected against the entry of new firms by patents, licenses, or other legal restrictions d. control a nonreproducible resource that is critical to production e. have been created over time by the mergers of many smaller firms
Changes in expectations about future price levels:
A. affect only the short-run aggregate supply curve. B. affect only the long-run aggregate supply curve. C. affect both the long-run aggregate supply curve and the short-run aggregate supply curve. D. do not affect either the long-run aggregate supply or the short-run aggregate supply curve.
Public goods face the
A) principle of rival consumption. B) free-rider problem. C) law of overproduction. D) exclusion principle.