Use the data in the Worked Problem on p. 287 (page 699 in Economics). Calculate the change in equilibrium expenditure when investment decreases by $150 billion
What will be an ideal response?
The multiplier equals 4 . Consequently the change in equilibrium expenditure equals (4) × (?$150 billion), or a decrease of $600 billion.
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A firm’s minimum AC is $10, its minimum AVC $7. Show this firm’s short-run supply curve, explaining how you obtained it.
What will be an ideal response?
If a monopolist produces to a point at which marginal revenue is more than marginal cost then
A. the firm should increase output. B. the firm should reduce output. C. the firm is maximizing profits. D. we do not know if the firm should increase or reduce without more information.
As new firms enter an increasing-cost industry
A. the LRAC curve shifts up. B. the position of the LRAC curve doesn't change, but firms move down their LRAC curve. C. the position of the LRAC curve doesn't change, but firms move up their LRAC curve. D. the LRAC curve shifts down.
Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40
Jane's consumer surplus from the coffee she buys is ________ per day. A) $1.60 B) $1.70 C) $4.80 D) $6.50