Economic efficiency is indicated by
A) P = AVC.
B) MR = MC.
C) P = MR.
D) P = MC.
Answer: D
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Because of the high cost of fuel, railroads such as Union Pacific Corp and CSX Corp have increased the price they charge to haul freight. This change means that
A) the demand curve for hauling freight has shifted leftward. B) the supply curve for hauling freight has shifted leftward. C) the demand curve for hauling freight has shifted rightward. D) the supply curve for hauling freight has shifted rightward. E) neither the supply curve nor the demand curve for hauling freight has shifted; the only change is that the price is higher.
The tax multiplier is smaller in absolute value than the government purchases multiplier because some portion of the
A) decrease in taxes will be saved by households and not spent, and some portion will be spent on imported goods. B) increase in government purchases will be saved by households and not spent, and some portion will be spent on imported goods. C) decrease in taxes will be saved by households and not spent, and some portion will be spent on consumer durable goods. D) increase in government purchases will be saved by households and not spent, and some portion will be spent on consumer durable goods.
________ choose the quantities of factors of production to hire and ________ choose the quantities of goods and services to produce
A) Markets; markets B) Firms; households C) Factor markets; goods markets D) Entrepreneurs; firms E) Firms; firms
Producers' total revenue will decrease if
A) income increases and the good is a normal good. B) the price rises and demand is elastic. C) the price rises and demand is inelastic. D) income falls and the good is an inferior good.