If supply increases and demand does not change, then price
a. as well as quantities demanded and supplied will increase
b. will decrease, and quantity demanded and supplied will increase
c. will decrease, and quantity demanded and supplied will decrease
d. and quantity demanded remain unchanged
e. remains unchanged, but both quantities demanded and supplied will decrease
If supply increases and demand does not change, then price
b. will decrease, and quantity demanded and supplied will increase
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Suppose product price is $24; MR = MC at Q = 200; AFC = $6; AVC = $16 . What do you advise this competitive price-taker firm to do?
a. Increase output. b. Decrease output. c. Shut down operations. d. Stay at the current output; the firm is earning a profit of $400. e. Stay at the current output even though the firm is losing $200.
If a firm’s average cost is declining, setting price equal to marginal cost will
A. maximize the firm’s profits. B. minimize the firm’s losses. C. guarantee that the firm will lose money. D. help the firm earn the opportunity costs of its resources.
In 2008, consumers were mailed a stimulus check in response to the recession. The result showed that Ricardian equivalence:
A. failed to hold, as most people spent a substantial share of the money. B. failed to hold, as most people saved the money. C. held, as most people saved the money. D. held, as most people spent a substantial share of the money.
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher