When the price level falls, households and firms reduce their holdings of money, leading to a lower interest rate and an increase in borrowing and an increase in RGDP demanded
a. True
b. False
Indicate whether the statement is true or false
True
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La Dila and Swiss Pro are the only two firms in an industry. The firms charge equal prices for their products, which are perfect substitutes. La Dila decides to lower its price slightly. Swiss Pro responds by cutting its price further
This price cutting will continue as long as each firm's ________. A) price is lower than marginal cost B) price is higher than marginal cost C) price is higher than zero D) price is higher than the average fixed cost
If you have a choice of consuming either two apples, three oranges, or one candy bar, the opportunity cost of the candy bar is:
a. two apples. b. three oranges. c. two apples and three oranges. d. two apples or three oranges, whichever you value more. e. the difference in the prices of the three options.
Graphically show why one electric company can operate more cheaply than two.
What will be an ideal response?
The profit-maximizing rule for a monopolistically competitive firm is to select the quantity at which
A) marginal revenue equals marginal cost. B) average revenue exceeds marginal cost by the greatest amount. C) price equals marginal cost. D) average revenue equals average total cost.