For a perfectly competitive firm, any price below its minimum AVC is a
A. negative price.
B. market price.
C. shutdown price.
D. profit maximizing price.
Answer: C
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Many Americans are selling their used cars and buying new fuel-efficient hybrids. Other things remaining the same, in the market for used cars, ________ and in the market for hybrids ________
A. supply increases and the price falls; demand increases and the price rises B. demand decreases and the price rises; supply increases and the price falls C. both demand and supply decrease and the price might rise, fall, or not change; demand increases and the price rises D. demand decreases, supply increases, and the price falls; supply in-creases and the price falls
How do banks create money?
What will be an ideal response?
Answer the following statements true (T) or false (F)
1. In a mature industry, all firms operate with constant returns to scale. 2. On a cost/output graph, the average fixed cost is constructed as a straight horizontal line. 3. Marginal cost crosses the average variable cost and the average total cost at their lowest points. 4. The average fixed cost remains constant even in the long run. 5. Marginal cost is related inversely to the marginal product.
Without considering the effect that a change in the value of a currency might have on trade, the net effect of an expansionary fiscal policy is:
A. ambiguous with respect to the exchange rate, but negative with respect to the trade balance. B. ambiguous with respect to the trade balance, but positive with respect to the exchange rate. C. negative with respect to the exchange rate and positive with respect to the trade balance. D. positive with respect to the exchange rate and negative with respect to the trade balance.