If your firm is producing a good at a level where marginal revenue equals marginal cost, and price is less than average variable cost, then in the short run your firm should:
A. shut down and suffer a loss equal to your fixed costs.
B. continue to produce, but increase output.
C. continue to produce the same amount.
D. continue to produce, but decrease output.
Answer: A
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C B. Falling; A; C C. Falling; A; B D. Rising; A; C
Suppose that an individual has a constant MRS of shoes for sneakers of 4:3 (that is, he or she is always willing to give up 3 pairs of sneakers to get 4 pairs of shoes). Then, if sneakers and shoes are equally costly, he or she will:
a. buy only sneakers. b. buy only shoes. c. spend his or her income equally on sneakers and shoes. d. wear sneakers only 3/4 of the time.
Cost-push inflation is due to:
a. raw material cost increases. b. energy cost increases. c. All of the answers are correct. d. labor cost increases.
With anchoring, there is a first-mover advantage in negotiations over price.
Answer the following statement true (T) or false (F)