In the above table, the average variable cost at 2 units of output is
A) $1.00.
B) $2.00.
C) $4.00.
D) $4.80.
B
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Consider a monopolist that has a total cost curve of TC = 110Q - (0.25)Q 2 . The market demand equation is Q d = 155 - P.
(A) What are the total revenue, marginal revenue, marginal cost, equilibrium quantity, equilibrium price, and profits for the monopolist in this market? (B) Suppose the government instructs the firm to produce using average cost pricing. What are the equilibrium quantity, equilibrium price, and profits? (C) Suppose further that the government wants the firm to produce where supply equals demand. What will be the equilibrium quantity, equilibrium price, and profits?
In the classical model, how do shifts in aggregate demand affect real GDP?
A) Real GDP will remain unchanged. B) Increases in aggregate demand increase real GDP. C) Increases in aggregate demand decrease real GDP. D) Decreases in aggregate demand increase real GDP.
The crowding-out effect stresses that increased government borrowing to cover a budget deficit will cause
a. a higher interest rate and depreciation of the U.S. dollar. b. a higher interest rate and appreciation of the U.S. dollar. c. a lower interest rate and depreciation of the U.S. dollar. d. a lower interest rate and appreciation of the U.S. dollar. e. no change in the interest rate and depreciation of the U.S. dollar.
Discuss the Coasian reasoning with an example