If a price searcher is producing at a level of output such that its marginal cost is $16 and its marginal revenue is $9, the firm should
a. increase output in order to reduce per-unit costs.
b. decrease the price of its product and expand output.
c. increase price and reduce its rate of output.
d. reduce both price and output.
C
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Refer to the scenario above. What is Alice's optimal bidding price?
A) $25,000 B) $30,000 C) $24,000 D) $36,000
Suppose the principal offers to share a percentage of the profit with the agent. Such a contract
A) will yield the same income for the agent as a hire contract would. B) is incentive compatible. C) creates a production inefficiency. D) would not be acceptable to any agent.
According to Keynesian economists, which of the following is not a consequence of increasing the money supply?
a. A lower interest rate. b. Greater investment. c. Lower real GDP. d. Higher real GDP.
Suppose the economy is suffering in a recessionary period. Firms are facing increasing inventories and individual consumers are increasing their saving to prepare for hard times ahead. What is likely to happen to the economy and can it correct itself and grow toward full employment in the short run?