When the demand for a good is price-elastic at a given output level:
A. total revenue is negative.
B. total revenue for the good will increase if its price decreases.
C. a large change in price will result in a relatively small change in the quantity demanded.
D. an increase in price will lead to an increase in total revenue for firms selling the good.
Answer: B
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Firms can make decisions using marginal analysis even if they do not know the shape of a demand curve
a. True b. False Indicate whether the statement is true or false
As the economy expands, the collection of personal income tax revenues automatically rises. This relationship best describes how the progressive income tax system:
A. increases crowding out in the economy. B. offsets the timing problem for fiscal policy. C. decreases real interest rates in the economy. D. provides built-in stability for the economy.
A competitive firm maximizes its profits (or minimizes is losses) by producing the quantity where the market price equals the firm's:
A. marginal cost. B. average total cost. C. average variable cost. D. average fixed cost.
A checkable deposit at a commercial bank is a(n):
A. asset to the depositor and a liability to the bank. B. liability to both the depositor and the bank. C. liability to the depositor and an asset to the bank. D. asset to both the depositor and the bank.