If total production (TP) is less than total expenditures (TE), it follows that
A) optimum inventory levels fall.
B) firms have underproduced.
C) firms increase the quantity of goods they produce.
D) b and c
E) a, b, and c
D
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The figure above shows the labor market in a small town. If the government imposes a wage of $10 that firms must at least pay,
A) the government has imposed a minimum wage and market forces are not allowed to work. B) inflation will occur as wages rise. C) job search will decrease. D) the government has imposed an efficiency wage. E) job rationing will decrease.
Using the Cobb-Douglas production function, while holding other inputs constant, if the amount of a specific factor is increasing ________
A) the increased amount of output from an extra unit of input declines B) the increased amount of output from an extra unit of input increases C) that factor's share of output is declining D) that factor's share of output is increasing E) none of the above
A brand name can affect a firm's
A) price elasticity of demand B) average total cost curve C) normal profit D) balance sheet
Which of the following shifts the short-run aggregate supply curve to the right?
a. a decrease in the actual price level b. an increase in the actual price level c. a decrease in the expected price level d. an increase in the expected price level