In the short run, a perfectly competitive firm will shut down if:
a. price is less than average cost.
b. marginal revenue is equal to marginal cost.
c. total revenue is less than total variable cost.
d. total revenue is equal to total cost.
c
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If firms are making profits under perfect competition, in the long run the industry supply will ______ and price will ______.
A. rise; rise B. fall; fall C. fall; rise D. rise; fall
Which of the following combinations of goods is in line with a cross-price elasticity equal to zero?
A) Pancakes and maple syrup B) Kentucky fried chicken and Dove deodorant C) Pepsi and Dr. Pepper D) None of the above
The demand curve for Widgets is given by QD = 6000 - 2y - 200p + 30pG, where QD is the quantity of widgets demanded, y is the per capita income and pG is the price of Gizmos. Compute the partial derivatives with respect to y and pG
What will be an ideal response?
If the Fed moves the economy upward along the short-run Phillips curve from an initial inflationary equilibrium, what is happening?
a. Unemployment is rising above the natural rate, output is decreasing, and inflation is decreasing. b. Unemployment is falling below the natural rate, output is decreasing, and inflation is increasing. c. Unemployment is rising above the natural rate, output is increasing, and inflation is decreasing. d. Unemployment is falling below the natural rate, output is increasing, and inflation is increasing. e. Unemployment is falling below the natural rate, output is increasing, and inflation is decreasing.