In the short run where total variable cost is ________ at a(n) ________ rate, marginal cost is positive and increasing.
A. increasing; decreasing
B. decreasing; decreasing
C. increasing; increasing
D. decreasing; increasing
Answer: C
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Suppose a market is in equilibrium. If a price ceiling is set by the government below the equilibrium price, which of the following is most likely to occur?
The "equilibrating mechanism," the reason the economy tends toward equilibrium in the simple Keynesian model, is primarily
A) autonomous but flexible prices. B) production responses to unplanned inventory changes. C) exogenous inventory changes. D) endogenous price changes.
The law of diminishing marginal utility
a. is valid only after basic necessities (such as food and shelter) have been obtained b. says that marginal utility decreases as more of a good is consumed c. implies that spending on a good will decrease as more of that good is consumed d. says that marginal utility decreases as income increases e. implies that spending on a good decreases as income increases
If the Fed increases the money supply, the equilibrium value of money decreases and the equilibrium price level increases
a. True b. False Indicate whether the statement is true or false