For products like parking lots and hotels, costs of building capacity are mostly fixed or sunk and firms in this industry typically face capacity constraints. Therefore,
a. If SRMR>SRMC at capacity, then the firms should price to fill capacity
b. If SRMR
d. If LRMR>LRMC at capacity, then the firms should price to fill capacity
a
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Which of the following models depicts the role of money as affecting only the price level in the short run?
a. The new classical model b. The Keynesian model c. The real business cycle model d. The monetarist model
Economic growth means:
A. more production of goods and services. B. people maintain their standard of living. C. all of a nation’s citizens must be better-educated. D. in general tax revenues are lower.
The construction of demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:
A. price. B. expectations. C. preferences. D. incomes.
Related to the Economics in Practice on page 318: Producers of Honest Tea stop adding sugar to their tea when the marginal utility to consumers of doing so is
A. negative. B. positive. C. zero. D. Indeterminate from the given information.