When a firm's MC curve shifts to the right, it implies that
A) new firms are entering the market.
B) labor productivity is decreasing.
C) labor productivity is increasing.
D) the firm's overhead costs are decreasing.
C
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In New Keynesian analysis, firms are assumed to be
A) interested solely in maximizing their profit. B) interested in both their profit and the avoidance of business cycles. C) interested solely in avoiding business cycles. D) interested solely in maximizing production.
Refer to Scenario 2.1. If P = $15, which of the following is true?
A) Quantity supplied is greater than quantity demanded. B) Quantity supplied is less than quantity demanded. C) Quantity supplied equals quantity demanded. D) There is a surplus.
If the income elasticity of demand for a good is -2.5, then
a. it is a normal good, and its demand curve will shift to the left if buyers' incomes increase b. it is a normal good, and its demand curve will shift to the right if buyers' incomes increase c. it is an inferior good, and its demand curve will shift to the right if buyers' incomes increase d. it is an inferior good, and its demand curve will shift to the left if buyers' incomes increase e. there is insufficient information to determine whether the good is normal or inferior
When aggregate expenditure increases, why is there a multiple expansion of income and real GDP? Trace the multiplier effect through the first four rounds when there is an increase in aggregate expenditure of $40 billion and the marginal propensity to consume is 0.75