A firm sells a product in a purely competitive market. The marginal cost of the product at the current output is $4.00 and the market price is $4.50. What should the firm do?
A. Shut down if the minimum possible average variable cost is below $4.50
B. Decrease output if the minimum possible average variable cost is below $4.50
C. Increase output if the minimum possible average variable cost is below $4.50
D. Decrease output if the minimum possible average variable cost is above $4.50
C. Increase output if the minimum possible average variable cost is below $4.50
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The supply curve for bonds would be shifted to the left by
A) a decrease in government borrowing. B) a decrease in the corporate tax on profits. C) an increase in tax subsidies for investment. D) an increase in expected inflation.
Taxes impact incentives to use resources since they distort relative prices
Indicate whether the statement is true or false
If a small percentage change in price causes a larger percentage change in the quantity demanded, the good has:
A. an elastic demand. B. an inelastic demand. C. a high magnitude of response. D. a low magnitude of response.
Which of the following programs involves the Federal Reserve directly purchasing short-term lending instruments from corporations?
A. Term Asset-Backed Securities Loan Facility. B. Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. C. Commercial Paper Funding Facility. D. Term Securities Lending Facility.