A firm is currently producing at the point where MC = MR. The situation for the firm at this point is P = $5, Q = 100, ATC = $6, AVC = $5.50. What do you recommend this firm do?
A) Increase production above the current output rate, because MC = MR at this rate of output.
B) Continue to produce the current output rate, because P > AVC.
C) Shut down, because AVC > P.
D) Shut down, because ATC > P.
C
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The interest rate is the price borrowers pay to borrow money.Key interest rates are controlled by the Federal Reserve System.If the Federal Reserve acts to reduce interest rates, economists would expect the quantity of money demanded to
A. increase. B. decrease. C. not change. D. not change, although the demand schedule itself will shift outward.
Assume equilibrium at full employment for an economy characterized by the simple Keynesian model. If the government raises taxes to eliminate a budget deficit, then
A) the rate of unemployment will increase. B) the level of aggregate output will increase. C) the price level will increase. D) the rate of interest will fall.
The basic economic issue concerning the FOR WHOM question is specifically interpreted to mean, who:
A.) Gets the available jobs. B.) Gets to consume the goods and services that are produced. C.) Inherits the accumulated wealth in the economy. D.) Produces the goods and services.
Using Figure 1.5 above, you can tell that 
A. there is constant opportunity cost. B. there is increasing opportunity cost. C. there is unemployment. D. the technology does not exist to produce 6 units of soda and 1 unit of pizza.