Total cost schedule for a competitive firm: 
If market price is $60, how many units of output will the firm produce?
A. 3 units of output.
B. 1 unit of output.
C. 2 units of output.
D. Zero units of output because the firm shuts down.
E. none of the above.
Answer: E
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If policymakers attempt to offset a favorable inflation shock with monetary ________, the resulting long-run equilibrium will be at ________ inflation rate compared to allowing the self-correcting mechanism return the economy to potential output.
A. easing; a lower B. easing; a higher C. tightening; a higher D. tightening; a lower
The Consumer Price Index (CPI):
A. assumes that consumers substitute away from cheaper goods. B. tends to understate the impact of price changes. C. is more accurate than the GDP deflator. D. tends to overstate the impact of price changes due to substitution bias.
Explain and show graphically how government deficits can "crowd out" private investment
What will be an ideal response?
In the short run, a perfectly competitive firm will shut down if:
a. price is less than average cost. b. marginal revenue is equal to marginal cost. c. total revenue is less than total variable cost. d. total revenue is equal to total cost.