Explain how the short-run supply curve of the competitive firm is derived.
What will be an ideal response?
Since the firm is either minimizing losses or maximizing profit in the short run if it produces where MC = P above minimum AVC for any price above minimum AVC, the quantity can simply be read off the MC curve. Thus the MC curve above minimum AVC becomes the firm’s short-run supply curve.
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The marginal propensity to consume (MPC) is computed as the change in consumption divided by the change in:
a. GDP. b. disposable personal income. c. saving. d. none of these.
The amount of money held in checking accounts is significantly greater than money in the form of currency
a. True b. False Indicate whether the statement is true or false
In economic theory, utility refers to the:
a) Satisfaction obtained from a good or service. b) Willingness to buy specific quantities of a good or service at a particular price. c) Additional satisfaction obtained from one more unit of a good or service. d) Decrease in satisfaction as more of a good or service is consumed.
The demand for money curve shows that there is an inverse relationship between the quantity of money demanded and the:
A. quantity of money supplied. B. gross domestic product (GDP). C. price level. D. interest rate.