At the full-employment level of GDP, the total value of goods demanded always equals the total value of goods supplied.
Answer the following statement true (T) or false (F)
False
This would be true only if macro equilibrium occurs at the full-employment level of output.
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The increase in spending that occurs because the demand for investment goods increases when the price level falls is known as the
A) price effect. B) international trade effect. C) wealth effect. D) interest rate effect.
The moral hazard in team production arises from
a. poorly designed team membership b. lack of proper assignment of individual tasks c. disorganization in groups d. a conflict between tactically best interest and one's duty e. insufficient experience
A purely competitive firm can be identified by the fact that:
A. There are other firms in the industry producing similar products B. It is making only normal profits in the short run C. Its average revenue equals its marginal revenue D. It experiences diminishing marginal returns
Pie-Oh-My, a monopolistically competitive firm, is producing 80 gourmet pies per day and selling each pie for $32. At that production level ATC is $40, AVC is $30, AFC is $10, and both MR and MC are $16. In the short run, this firm should
A. continue to produce 80 pies, as price is greater than AVC. B. increase output to the point where price equals marginal cost. C. shutdown and produce zero pies and pay fixed costs. D. decrease output to the point where price equals average total cost.