In the aggregate expenditures model, the equilibrium GDP is:
A. Assumed to be equal to the potential GDP level
B. Not necessarily equal to the full-employment GDP
C. Always above the potential GDP level
D. Always less than the full-employment GDP level
B. Not necessarily equal to the full-employment GDP
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The short-run supply curve of the perfectly competitive firm is the firm’s
A. MC curve. B. AVC curve. C. MC curve above the minimum point on the AVC curve. D. MC curve above the minimum point on the ATC curve.
A profit-maximizing firm will hire additional units of labor until
A. the extra cost from hiring the last worker equals the cost of the product. B. the additional cost of hiring the last worker equals the additional revenue generated by that worker. C. the additional cost of hiring the last worker equals the marginal factor cost of the worker. D. the extra revenue from hiring the last worker equals the marginal physical product of labor.
Maryann and Don want to open their own deli. To do so, Maryann must give up her job, at which she earns $20,000 per year, and Don must give up his part-time job, at which he earns $10,000 per year. They must liquidate their money market fund, which earns $1,000 interest annually. The rent on the building is $10,000 per year, and expenses for such necessities as utilities, corned beef, and pickles
are $35,000 annually. What minimum amount of revenue per year would make it worthwhile, financially, for Maryann and Don to operate the deli? a. $10,000 b. $35,000 c. $45,000 d. $31,000 e. $76,000
A price floor that is set above market equilibrium will cause
A. queuing on the part of consumers. B. a surplus. C. an excess quantity demanded. D. a shortage.