National income and domestic product must be equal
a. True
b. False
Indicate whether the statement is true or false
True
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Competition among sellers occurs
A) when marginal revenue equals marginal cost. B) when price equals marginal cost. C) when price equals marginal revenue. D) whenever sellers try to attract customers from one another.
An important reason why economies at an early stage of development tend to operate inefficiently is
A) they tend to be dominated by the agricultural sector, where productivity is usually low. B) they tend to have authoritarian governments that stifle innovation. C) they tend to be plagued by superstitious beliefs that stifle innovation. D) the high transactions costs associated with barter.
Figure 5.1 provides support for the Fisher effect, by ________
A) displaying a positive relationship between the inflation rate and the nominal interest rate B) showing how developed economies like the U.S. and Japan have less inflation than economies like Turkey and Indonesia C) focusing on short-run fluctuations, rather than long run averages D) plotting observed, rather than expected inflation E) showing that output is unaffected by changes in the money supply
A perfectly competitive firm is currently producing where price is $8 and both marginal cost and average variable cost are $9 . To maximize profit or minimize loss in the short run, this firm should
a. raise its price b. increase its output c. reduce its output d. lower its price e. shut down