A firm can always increase its output by one unit at a marginal cost of $10 . Its marginal cost curve is
a. a horizontal line.
b. a vertical line.
c. a ray with slope equal to 10.
d. exactly one-tenth as steep as its total cost curve.
a
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List and explain the three subgroups of the Federal Reserve System
What will be an ideal response?
A noisy party that keeps neighbors awake is an example of a
A) negative production externality. B) positive production externality. C) negative consumption externality. D) positive consumption externality. E) Both answers B and C are correct.
Economists of the rational expectations school: a. have no confidence in the ability of workers and firms to observe and react to economic events
b. believe workers and firms behave the same regardless of what the Fed does. c. have great faith in the ability of monetary policy makers to maintain a full employment economy with stable prices. d. believe that effective monetary policy can shift the potential level of output to the right. e. believe workers and firms make decisions based on what they think monetary policy will be in the future.
In a competitive market equilibrium
A) total consumer surplus equals total producer surplus. B) marginal benefit and marginal cost are maximized. C) consumers and producers benefit equally. D) the marginal benefit equals the marginal cost of the last unit sold.