You're called in as a consultant: Price is $24 . At a production level of 200 units, MC = MR, AFC = $6, and AVC = $25 . What do you advise this firm to do?
a. Increase output.
b. Decrease output.
c. Shut down operations.
d. Stay at the current output; the firm is earning a profit of $1,400.
e. Stay at the current output; the firm is losing $1,400.
C
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On a production possibilities frontier, 500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier, 300 pounds of apples and 1,300 pounds of bananas can be produced
Between these points, what is the opportunity cost of producing a pound of apples? A) 2 pounds of bananas B) 5/12 of a pound of bananas C) 0.5 of a pound of bananas D) 2 pounds of apples E) 100 pounds of bananas
Refer to Figure 17-4. Consider the shift in the short-run Phillips curves shown in the above graph. This shift may be explained by
A) an increase in the expected rate of inflation from 4.0 to 5.5 percent. B) an increase in the natural rate of unemployment from 5.0 to 6.2 percent. C) either an increase in the natural rate of unemployment from 5.0 to 6.2 percent or an increase in the expected rate of inflation from 4.0 to 5.5 percent. D) None of the above is correct.
Under a fixed exchange rate regime, a central bank that does not want to acquire international reserves to keep its currency from ________ will decide to ________ its currency
A) depreciating; revalue B) depreciating; devalue C) appreciating; revalue D) appreciating; devalue
If a perfectly competitive market is in equilibrium and market demand decreases, which of the following would happen?
a. both producer and consumer surplus would increase b. both producer and consumer surplus would decrease c. producer surplus would decrease and consumer surplus would increase d. producer surplus would increase and consumer surplus would decrease e. producer and consumer surplus would remain unchanged