Which of the following relationships is NOT valid?
A) Rising marginal cost implies that average total cost is also rising.
B) When marginal cost is below average total cost, the latter is falling.
C) When marginal cost is above average variable cost, AVC is rising.
D) none of the above
A
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Which of the following is likely to happen during a boom?
A) The Fed will increase the federal funds rate. B) The Fed will lower the federal funds rate. C) The Fed will increase the supply of money. D) The Fed will lower the reserve requirement.
What are the effects of a tariff on a good on various groups and on the total surplus in the country that imposes the tariff?
What will be an ideal response?
A severe drought has devastated cocoa plants, causing an increase in the price of chocolate. In the market for chocolate chip cookies
A) a surplus will arise. B) supply has decreased and price has increased. C) quantity has decreased and price has decreased. D) quantity demanded has increased.