A major weakness of the kinked demand curve model is that it does not explain how the equilibrium price, i.e., the price at the kink in the demand curve, is determined
Indicate whether the statement is true or false
TRUE
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Jack is selling his sweaters for the market price of $40. His average variable costs are $50. In this situation, Jack should do which of the following?
a. Shut down and only lose his fixed cost. b. Shut down and lose his fixed and variable cost. c. Shut down and only lose his variable cost. d. Keep producing and lose some of his variable cost.
Suppose you get a tax refund of $4,000 and instead of spending it on items that had been on your wish list for two years, you put it all in your checking account at the First National Bank of Urbana. And if the legal reserve requirement was 20 percent, your cash deposit of $4,000 in the Urbana bank makes it possible for the banking system to potentially create (including your $4,000 . a total
amount of money of a. $800 b. $3,200 c. $4,000 d. $16,000 e. $20,000
The purchase of VCU2 by Tomas Tiergarten, a private resident, causes the nation's:
a. Monetary base to fall. b. M2 money supply to fall. c. M2 money multiplier to fall. d. Monetary base to remain the same.
The difference between a firm's total revenues and total costs when all explicit and implicit costs are included is the firm's:
A. economic profit. B. accounting profit. C. opportunity cost of capital. D. long-run average total cost.