If a competitive firm maximizes shortminusrun profits by producing some quantity of? output, which of the following must be true at that level of? output?
A) p = MC.
B) MR = MC.
C) p ? AVC.
D) All of the above.
Answer: D) All of the above.
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Suppose the marginal product of labor is MPN = 200 - 0.5N
where N is aggregate employment. The aggregate quantity of labor supplied is 100 + 4w, where w is the real wage. The government imposes a minimum wage of 60. What is the quantity of employment? A) 240 B) 260 C) 280 D) 300
Specialization according to comparative advantage followed by free trade makes every economy better off
a. True b. False Indicate whether the statement is true or false
The supply of loanable funds curve shows:
a. a negative relationship between the interest rate and the quantity of loanable funds. b. a positive relationship between the interest rate and the quantity of loanable funds. c. an indirect relationship between the marginal rate of return on investment and the quantity of loanable funds. d. a negative relationship between the expected marginal rate of return on investment and the quantity of loanable funds.
If the marginal propensity to consume (MPC) is 0.75 and if policy makers wish to increase real GDP by $300 million to fight a recession, then by how much would taxes have to change?
A. -$30 million B. -$50 million C. -100 million D. -300 million