Profit maximization occurs at the quantity where marginal cost equals marginal revenue
a. True
b. False
A
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If the economy is at full employment, then the inflation rate
A) is less than the expected inflation rate. B) is equal to zero. C) can be anywhere on a short-run Phillips curve. D) is equal to the expected inflation rate. E) exceeds the expected inflation rate.
In goods market equilibrium in an open economy,
A) the desired amount of exports must equal the desired amount of imports. B) the desired amount of exports must equal the desired amount of imports less the amount lent abroad. C) the desired amount of national saving must equal the desired amount of domestic investment. D) the desired amount of national saving must equal the desired amount of domestic investment plus the amount lent abroad.
If a 30 percent change in price causes a 15 percent change in quantity supplied, then the price elasticity of supply is about
a. 0.5, and supply is elastic. b. 0.5, and supply is inelastic. c. 2, and supply is inelastic. d. 2, and supply is elastic.
All else equal, if there are diminishing returns, then what happens to productivity if both capital and labor increase?
a. Productivity will definitely fall. b. Productivity will definitely be unchanged. c. Productivity will definitely rise. d. None of the above are necessarily correct.