If the firm in Figure 17-4 above maintains its set price of P0, rather than dropping price to P1, it must be facing a "menu cost" of adjusting its price that exceeds
A) K - G.
B) K + G.
C) G - K.
D) J.
E) K.
A
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Which of these curves is the competitive firm's short-run supply curve?
a. the average variable cost curve above marginal cost b. the average total cost curve above marginal cost c. the marginal cost curve above average variable cost d. the average fixed cost curve
The responsiveness of demand to changes in income holding the good's relative price constant is
A) price elasticity of demand. B) income elasticity of demand. C) elasticity of supply. D) cross price elasticity of demand.
Maurice Allais, Reinhard Selten, and Vernon Smith all were awarded the Nobel Prize in Economics in part because
A) of their work with experimental economics. B) they discovered the first example of a Giffen good. C) of their work on the substitution and income effects of price changes. D) they proved that external economies would lead to market failure.
Refer to the information provided in Figure 29.1 below to answer the question(s) that follow.
Figure 29.1Refer to Figure 29.1. If policy makers decide at time t2 that the economy is contracting too fast, but the policy changes start affecting the economy at t4, then the policy will be
A. inappropriate. B. optimal. C. well timed. D. ineffective.