According to Tobin's q theory, if q is ________, new plant and equipment capital is ________ relative to the market value of business firms, so companies can buy a lot of new investment goods with only a ________ issue of stock
A) high; dear; large
B) high; cheap; large
C) high; cheap; small
D) low; cheap; large
E) low; cheap; small
C
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Refer to Figure 23-3. Suppose that investment spending decreases by $5 million, decreasing aggregate expenditure and decreasing real GDP from GDP2 to GDP1. If the MPC is 0.8, then what is the change in GDP?
A) -$4 million B) -$5 million C) -$25 million D) -$40 million
How does a firm that is losing money in the short run decide whether to shut down or continue to produce to minimize its losses?
What will be an ideal response?
A perfectly competitive firm's short-run supply curve is the part of its marginal cost curve that is:
a. upward sloping. b. above the minimum level of average variable cost. c. above average fixed cost. d. both a and b.
If the unit cost of output for a computer is $2,000 and if firms' average markup is 10 percent, what is the total cost to the consumer?
a. $2,000 b. $2,010 c. $2,020 d. $2,200 e. $20