Refer to the information provided in Figure 9.2 below to answer the question(s) that follow.
Figure 9.2Refer to Figure 9.2. If demand for wheat is D1, then a profit-maximizing firm will produce ________ units and earn ________.
A. 12; positive profits
B. 10; negative profits
C. 5; zero profits
D. 0; negative profits
Answer: D
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In the above figure, if d1 is the relevant demand curve for this firm, then which level of output will maximize this firm's profits or minimize its losses?
A) A B) B C) C D) D
In an oligopoly, when the quantity effect outweighs the price effect:
A. an increase in output may increase the firm's profits. B. a decrease in output may increase the firm's profits. C. keeping output constant and raising price will increase the firm's profits. D. keeping output constant and lowering price will increase the firm's profits.
A liquidity trap exists when a change in the money supply immediately and drastically affects interest rates.
a. true b. false
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2. B. P1 and Y2. C. P4 and Y2. D. P1 and Y1.