In the above figure, what will be the output level produced if average cost pricing is used?
A) 1,200
B) 900
C) 700
D) somewhere between 900 and 1,200
D
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Pegging a country's exchange rate to the dollar can be advantageous in all of the following situations except
A) if investors believe the dollar to be more stable than the domestic country's currency. B) if a country wishes to conduct independent monetary policy. C) if imports are a significant fraction of the goods the country's consumers buy. D) if the country has extensive trade with the United States.
Refer to Figure 10.1. If the monopolist is not regulated, the price will be set at ________
A) P1 B) P2 C) P3 D) P4 E) none of the above
Some economists argue suddenly reducing money supply growth is a costly way to reduce inflation and that it may not work. For example, if a government cuts money growth but makes no real fiscal reforms, people will expect the government will eventually
need to expand the money supply to pay for its expenditures. Thus, the promise to fight inflation will not be credible. Explain why credibility is important to a reduction in the inflation rate.
An economy where there is a wide gap between the compensation of the top workers in certain fields and that of the merely competent workers is called a(n)
A. inequality economy. B. hyperinflation economy. C. superstar economy. D. competitive economy.