If a firm in perfect competition is suffering a loss, it should continue to operate in the short run as long as
a. AR exceeds AVC.
b. AR exceeds AFC.
c. AVC exceeds AFC.
d. AFC exceeds AVC.
a. AR exceeds AVC.
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Caleb teaches economics at Yucky State University and is paid $50,000 per year. He also provides economic forecasts for local business for which he charges $100 per hour. Which of the following is true?
a. all of Caleb's income is salary b. some of Caleb's income is salary and some is personal interest c. all of Caleb's income is proprietor's income d. some of Caleb's income is salary and some is proprietor's income e. all of Caleb's income is personal interest
Assume the price of good Y with its quantity measured on the vertical axis is $20 and the price of good X with its quantity measured on the horizontal axis is $5 . If the consumer's budget is $100, then the absolute value of the slope of the budget line is:
a. 100. b. 20. c. 1/4. d. 4.
According to A.P. Lerner, splitting income equally among individuals was most appropriate for maximizing combined satisfaction
Indicate whether the statement is true or false
Initially, the economy is in long-run equilibrium. The aggregate demand curve then shifts $80 billion to the left. The government wants to change spending to offset this decrease in demand. The MPC is 0.75 . Suppose the effect on aggregate demand of a tax change is 3/4 as strong as the effect of a change in government expenditure. There is no crowding out and no accelerator effect. What should
the government do if it wants to offset the decrease in real GDP? a. Raise both taxes and expenditures by $80 billion dollars. b. Raise both taxes and expenditures by $10 billion dollars. c. Reduce both taxes and expenditures by $80 billion dollars. d. Reduce both taxes and expenditures by $10 billion dollars.