If households in the economy decide to take money out of checking account deposits and hold it as currency, this will initially
A) decrease M1 and not change M2. B) not change M1 and not change M2.
C) not change M1 and increase M2. D) decrease M1 and decrease M2.
B
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Refer to Figure 16-12. An increase in government purchases of $200 billion causes aggregate demand to shift ultimately from AD1 to AD2
Assuming a constant price level, the difference in real GDP between point A and point B will be ________ $200 billion. A) less than B) greater than C) equal to D) There is insufficient information given here to draw a conclusion.
Werner & Sons is a manufacturer of three-ring binders operating in a perfectly competitive industry. Table 12-5 shows the firm's cost schedule
Table 12-5 Quantity (cases) Variable Cost Total Cost Marginal Cost Average Variable Cost Average Total Cost 0 $0 $76 1 30 106 2 50 3 134 4 140 5 160 6 114 7 150 8 190 9 316 Use the table to answer the following questions. a. Complete Table 12-5 by filling in the blank cells. b. Werner is selling in a perfectly competitive market at a price of $40. What is the profit maximizing or loss-minimizing output? c. Calculate the firm's profit or loss. d. Should the firm continue to produce in the short run? Explain. e. If the firm's fixed costs were $30 higher what would be the profit-maximizing output level in the short run? Indicate whether the output level will increase, decrease, or remain unchanged compared to your answer in b. f. Suppose fixed cost remains at $76. If the price of three-ring binders falls to $20 what is the profit-maximizing or loss-minimizing output? g. Calculate the profit or loss. Should the firm continue to produce in the short run? Explain your answer. h. Suppose the fixed cost remains at $76. What price corresponds to the shut-down point? i. Suppose the fixed cost remains at $76. What price corresponds to the break-even point?
From the perspective of households the uses of income are
A) taxes, saving, consumption of domestically produced and imported goods. B) taxes, investment, consumption of domestically produced and imported goods. C) taxes, saving, consumption, exports, and imports. D) None of the above.
What is the profit maximization point for a firm in a purely competitive environment?
a. The output where P = MC b. The output where P < MC c. The output where P > MC d. The output where MR = MC e. The output where AVC < P