According to classical economists,
A. prices are rigid.
B. both V and Q are variable for an economy in short-run equilibrium.
C. changes in M cause changes in V.
D. the velocity of money is constant.
Answer: D
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An increase in fixed costs will lower a firm's
a. total cost. b. output. c. prices. d. profit.
If the price of one input changes, generally the firm will change its use of both inputs.
Answer the following statement true (T) or false (F)
Equating society's marginal benefits with marginal costs will ensure that the economically efficient level of either private or public goods is attained
Indicate whether the statement is true or false
Joe's Juice Shop operates in a monopolistically competitive market. Joe's is currently producing where its average total cost is minimized. In the long run we would expect Joe's output to
a. decrease and average total cost to increase. b. decrease and average total cost to decrease. c. remain unchanged as Joe's is doing the best it can. d. increase and average total costs to decrease.