A firm's revenue is price per unit times the quantity sold, so an increase in price decreases revenue if demand is elastic.
a. true
b. false
Answer: a. true
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The years after 1960 witnessed some social and economic changes of extraordinary magnitude, including all of the following except
(a) The core of U.S. growth shifted away from its historic base in heavy industry. (b) A huge influx of women into the labor force occurred. (c) Legislation provided for greater safety on the job and cleaner air and water. (d) The Cold War ended in the early 1970s, following the end of the Vietnam War, and defense spending declined significantly from the Cold War years of the 1950s.
If there is zero search cost, then in the presence of asymmetric information, competitive firms will
A) charge the monopoly price. B) charge the competitive price. C) charge zero price. D) shut down.
Marginal cost is ____________
a. The revenue from selling an additional unit of output b. none of the above c. The total cost of production d. The cost of producing an additional unit of output
If there is a large increase in the price of oil and the Fed wishes to maintain stable output, which of the following should it do?
a. Do nothing, because the self-correcting mechanism will adjust the economy b. Sell bonds in the open market c. Wait, because output seldom changes when there is an increase in the price of oil d. Encourage firms to not adjust the wages they pay e. Buy bonds in the open market