The average fixed cost curve
A) is always positively sloped.
B) is U-shaped.
C) has an upside-down U shape.
D) is always negatively sloped.
E) is horizontal.
D
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Raising the federal funds rate shifts the aggregate demand curve ________ so that real GDP ________ and the price level ________
A) rightward; increases; rises B) leftward; decreases; rises C) rightward; increases; falls D) leftward; decreases; falls E) leftward; increases; rises
The above figure shows Jane's budget line and two of her indifference curves. Which of the following happens to Jane's budget line if the price of a lobster dinner increased?
A) It would rotate inward around the vertical intercept, 10 lobster dinners. B) It would rotate outward around the vertical intercept, 10 lobster dinners. C) It would rotate inward around the horizontal intercept, 20 steak dinners. D) It would rotate outward around the horizontal intercept, 20 steak dinners.
Refer to Figure 15-15. The firm would maximize profit by producing
A) Q1 units. B) Q2 units. C) Q3 units. D) Q4 units.
Suppose a risk-neutral power plant needs 10,000 tons of coal for its operations next month. It is uncertain about the future price of coal. Today it sells for $60 a ton but next month it could be $50 or $70 (with equal probability). How much would the power plant be willing to pay today for an option to buy a ton of coal next month at today's price? (Ignore discounting over the short period of a
month.) a. 5 b. 4 c. 3 d. 0