Assume that a firm has $100 million in real assets and $90 in real liabilities. If the price level falls by ten percent, the real value of liabilities would ________
A) fall to $81 million
B) change, but more information must be provided to determine the exact movement
C) remain unchanged
D) rise to $99 million
D
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When a firm faces a downward-sloping demand curve, marginal revenue
A) must exceed price because the price effect outweighs the output effect. B) must exceed price because the output effect outweighs the price effect. C) is less than price because a firm must lower its price to sell more. D) equals price because the firm sells a standardized product.
In the circular flow diagram,
a. money flows from the firms to the households through the product market b. money flows from the households to the firms through the product market c. money flows from the households to the firms through the resource market d. money flows from the households to the firms through both the product market and the resource market e. resources flow to the households from the firms through the product market
Which of the following examples shows a decrease in total revenue for an elastic price demand?
a. When the price of saws increases by 5 percent, the quantity demanded decreases by 9 percent. b. When the price of nails decreases by 10 percent, the quantity demanded increases by 15 percent. c. When the price of wrenches increases by 8 percent, the quantity demanded decreases by 5 percent. d. When the price of pliers decreases by 3 percent, the quantity demanded increases by 5 percent.
Refer to the diagram. At P 3 , this firm will:
A. produce 14 units and realize an economic profit.
B. produce 62 units and earn only a normal profit.
C. produce 40 units and incur a loss.
D. shut down in the short run.