A firm will choose to shut down in the short run when:
a. price is above the minimum point of AVC but below the minimum point of ATC price
b. price is below the minimum point of AVC.
c. marginal cost begins to increase.
d. total revenue is not sufficient to cover total cost.
Ans: b. price is below the minimum point of AVC.
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An increase in the money supply in the Friedman-Lucas money surprise model
A) reduces aggregate output, raises the price level, and reduces the real interest rate. B) increases aggregate output, reduces the price level, and reduces the real interest rate. C) increases aggregate output, raises the price level, and reduces the real interest rate. D) reduces aggregate output, raises the price level, and raises the real interest rate.
Suppose that a federal election is coming soon and the government has been running persistent large budget deficits. Constitutional economists would most likely urge ___________________ in order to eliminate future budget deficits
A) voters to vote for liberal candidates B) voters to vote for conservative candidates C) Congress to pass a law constraining them to spend no more than what they are receiving in tax revenues D) Congress to remove all constraints on spending and taxes.
Other things remaining the same, which of the following is likely to happen if there is a decrease in the price of flour products?
A) There will be a decrease in both the wage rate and the employment levels in the flour industry. B) There will be an increase in both the wage rate and the employment levels in the flour industry. C) There will be an increase in the wage rate and a decrease in the employment levels in the flour industry. D) There will be a decrease in the wage rate and an increase in the employment levels in the flour industry.
Refer to the table below. If this market is a Cournot Oligopoly and Firm X is produces 50 units, what is Firm Y's marginal revenue at a price of $70?
The table above shows the market demand for a product that both Firm X and Firm Y manufacture. Both firms produce an identical product and the firms' average total and marginal cost are equal and constant.
A) $80 B) $40 C) $60 D) $50