The Marginal Cost curve usually
A. cuts through the minimum of the average total cost curve.
B. cuts through the minimum of the average variable cost curve.
C. is J-shaped.
D. all of the options are correct.
Answer: D
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Assume that taxes are constant. If the government borrows $17 billion in new funds and has a budget deficit of $35 billion, then the central bank has to:
a. reduce the money supply by $52 billion. b. reduce the money supply by $35 billion. c. increase the money supply by $17 billion. d. increase the money supply by $35 billion. e. increase the money supply by $18 billion.
When government revenue is less than government spending, the nation has a:
A. government budget deficit. B. trade surplus. C. trade deficit. D. government budget surplus.
If the marginal propensity to consume is 0.75, then the value of the tax multiplier is
A) -2.5.
B) -3.
C) 1.25.
D) 1.4.
Refer to the graphs shown, which depict a perfectly competitive market and firm. If market demand decreases from D0 to D1:
A. market price remains at P0 because perfectly competitive firms can't earn positive economic profit. B. the firm's output remains at q1 because perfectly competitive firms can't earn positive economic profit. C. market price falls from P0 to P1 and the firm's output rises from q0 to q1. D. market price falls from P0 to P1 and the firm's output falls from q1 to q0.