In the long run, a monopolistically competitive firm that is incurring a loss will ________ if total revenue is less than variable costs.
A. increase its output
B. decrease its output
C. shut down
D. continue to produce its current output
Answer: C
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Aggregate expenditure is total
A. value added in the economy. B. income of households, businesses, governments, and foreigners. C. spending on final goods and services. D. revenue from the sale of goods and services.
Arturo wants to start a business where he is the chief executive officer and the company does issue stock. The type of business Arturo wants to start is a
A) sole proprietorship. B) corporation. C) partnership. D) Any of the above could be correct.
The price elasticity of demand for a good measures the willingness of
a. consumers to buy less of the good as price rises. b. consumers to avoid monopolistic markets in favor of competitive markets. c. firms to produce more of a good as price rises. d. firms to respond to the tastes of consumers.
A decrease in the inflation target by the central bank would:
A. cause the dynamic aggregate demand curve to shift to the right. B. cause the dynamic aggregate demand curve to shift to the left. C. have no impact on the positioning of the dynamic aggregate demand curve. D. be reflected by a movement down and along the existing dynamic aggregate demand curve.