Shama is producing candles in a perfectly competitive market. When she produces 500 candles, her total cost is $250. If she produces one additional candle, her total cost increases to $260
In order to maximize her profit, she should produce the additional candle A) if the market price for a candle is $12.
B) only if the market price exceeds $260 for a candle.
C) only if the market price exceeds $250 for a candle.
D) if the market price for a candle exceeds $0.50.
E) if her price exceeds her average total cost.
A
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The policy irrelevance proposition implies that
A) anticipated monetary policy actions are effective in increasing real GDP, but they do not reduce unemployment. B) anticipated monetary policy actions are effective in stimulating aggregate supply, but they are not effective in stimulating aggregate demand. C) unanticipated monetary policy actions are equally effective in stimulating both aggregate demand and aggregate supply. D) anticipated monetary policy actions are ineffective in generating changes in real GDP.
Decrease in stock market wealth will ________ the expenditure curve:
A) decrease. B) increase. C) not change. D) none of the above.
Suppose the production of DVD players can be represented by the following production function: q = L0.4K0.4. Which of the following statements is (are) TRUE?
A) The production function has decreasing returns to scale. B) The marginal productivity of labor falls as labor increases in the short run. C) Capital and labor can be substituted for one another. D) All of the above.
The sign of the price elasticity coefficient for a normal good will:
a. always be negative. b. always be positive. c. be positive if demand is elastic but negative if demand is inelastic. d. be positive if demand is inelastic but negative if demand is elastic.