If a consumer is spending all of his/her income in a manner where MUa / Pa is greater than MUb / Pb, then the consumer:
a. is maximizing his/her utility.
b. should increase his/her purchases of B and decrease the purchases of A.
c. should spend more money on both goods.
d. should spend less money on both goods.
e. should increase the purchases of A and decrease the purchases of B.
e
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A monopolistically competitive firm that earns a profit in the short run will definitely incur a loss in the long run
a. True b. False Indicate whether the statement is true or false
The opportunity cost of doing or getting something is best and fully defined as:
A. The difference between the marginal cost and benefit of doing something B. The materials used in doing or getting something C. The value of the best alternative that is given up in order to do or get something D. The money spent in doing or getting something
The average variable cost of producing 250 sundaes is $5. At this level of output, average variable cost is minimized. Which of the following statements is true?
A. Average fixed cost is minimized at an output less than 250 sundaes. B. Total cost of producing 250 sundaes is $1,250. C. Average total cost is minimized at an output greater than 250 sundaes. D. Marginal cost of the 251st sundae is $1,250.
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower