Answer the following statement(s) true (T) or false (F)
1. When faced with a rent increase, the firm's best policy is to use a small price increase to compensate for some, but not all, of the loss.
2. A change in a variable cost causes a parallel upward shift in the marginal cost curve.
3. When the price of fabric falls, it does not benefit a clothing manufacturer to lower its prices since
that will only reduce its profit margin.
4. If 1,000 yards of denim can produce 10,000 pairs of jean, then 2,000 yards of denim can produce 20,000 pairs of jeans and 30,000 yards of denim can produce 30,000 pairs of jeans.
5. Since Marginal Revenue measures the additional revenue generated by selling one more unit of the product, it must always be positive.
1. False
2. False
3. False
4. False
5. False
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In this graph, why is there a profit?
a. C is equal to the ATC at q*.
b. P* is equal to D at 0.
c. ATC is more than the MR at q*.
d. P* is more than C at q*.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.
The real interest rate is defined as the:
A. actual interest rate. B. fixed-rate on consumer loans. C. nominal interest rate minus the inflation rate. D. expected interest rate minus the inflation rate.
Graphically show and explain the effects of an improvement in the state of technology
What will be an ideal response?