In the short run, a price searcher wishing to maximize profits or minimize losses should produce the output that
a. equates marginal cost with marginal revenue.
b. equates marginal cost with price.
c. corresponds to the lowest point on the average variable cost curve.
d. corresponds to the lowest point on the average total cost curve.
A
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To explain the existence of excess capacity, Keynes argued that
A) prices and wages are flexible, and eventually markets would go back to equilibrium. B) the long run average cost curve should not occur at the full employment level. C) the aggregate demand curve can be manipulated by advertising. D) prices and wages are inflexible in the downward direction.
Jane has $500 a week to spend on clothing and food. The price of clothing is $25 and the price of food is $10. What is the equation for Jane's budget constraint?
A. ($25 × Clothing) × ($10 × Food) < $500 B. ($25 × Clothing) / ($10 × Food) = $500 C. $25 × Clothing + $10 × Food ? $500 D. $25 × Clothing + $10 × Food = $500
Having more relevant instruments
A) is a problem because instead of being just identified, the regression now becomes overidentified. B) is like having a larger sample size in that the more information is available for use in the IV regressions. C) typically results in larger standard errors for the TSLS estimator. D) is not as important for inference as having the same number of endogenous variables as instruments.
At a price of $18, the marginal revenue of a movie seller is $12. If the marginal cost of a movie is $9, the firm should increase its price.
Answer the following statement true (T) or false (F)