By looking at the marginal cost and marginal revenue curves, you can find out
a. if this firm should shut down.
b. if this is a profitable business.
c. at what output the firm would maximize profits or minimize losses.
d. All of these.
c. at what output the firm would maximize profits or minimize losses.
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Assuming steak and potatoes are complements, other things being equal, an increase in the price of steak, will:
a. increase the demand for potatoes. b. decrease the demand for potatoes. c. increase the demand for steak. d. decrease the demand for steak.
According to Keynesians, an increase in the money supply will have its greatest impact on real GDP and least impact on the price level when the aggregate demand curve intersects
a. the vertical portion of the aggregate supply curve b. the upward sloping portion of the aggregate supply curve c. the horizontal portion of the aggregate supply curve d. either the upward sloping or the vertical portions of the aggregate supply curve e. either the horizontal or vertical portions of the aggregate supply curve
Consider a consumer who purchases two goods, X and Y. If the price of good Y falls, then the substitution effect by itself will
a. cause the consumer to buy more of good Y and less of good X. b. cause the consumer to buy more of good X and less of good Y. c. not affect the amount of goods X and Y that the consumer buys. d. result in an upward-sloping demand for good Y because of the substitution effect.
Even when allowed to collude, firms in an oligopoly may choose to cheat on their agreements with the rest of the cartel. Why?