In general, in the short run, the supply curve of a purely competitive firm is:
A. the rising portion of the average-total-cost (ATC) curve.
B. the rising portion of the marginal cost curve above the AVC curve.
C. identical to the marginal cost curve.
D. a horizontal line equal to the market price.
Answer: B
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If the absolute value of the slope of the demand curve is 0.25, price is $8 per unit, and quantity demanded is 12 units, then demand for this good is:
A. elastic. B. inelastic. C. perfectly elastic. D. unit elastic.
According to the Taylor rule, if inflation in the last year was 6% and output was 2% below its full-employment level, the nominal Fed funds rate should be
A) 3%. B) 5%. C) 7%. D) 9%.
Refer to Scenario 18.1. What should the fishermen do if they know the factory will maximize profits and no negotiation is possible?
A) Install a treatment plant. B) Do not install a treatment plant. C) It makes no difference if the fishermen do or do not install a treatment plant. D) Install a filter. E) Exit the industry.
The marginal revenue product curve shifts when
A) wages fall. B) there is a change in the product price workers are producing. C) wages rise. D) the wages paid exceed the price.