Profit per unit is maximized when the firm produces the output where
A. The MC is minimized.
B. The ATC is minimized.
C. MC equals MR.
D. Demand equals MC.
Answer: B
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Classical macroeconomic theorists argued that when households reduce consumption and deposit money into savings accounts, aggregate spending will:
A. increase because households will have more wealth. B. fall because banks typically make it difficult for businesses to borrow money. C. fall because consumers are saving instead of spending. D. not fall because banks will lend that money out to businesses.
Suppose market demand is Q = 1000 - 4p. If all firms have LRAC = 50 - 5q + q2, how many identical firms will there be when this industry is in long-run equilibrium?
What will be an ideal response?
Which of the following is true of the aggregate supply curve?
a. It shows the inverse relationship between prices and national output. b. It shows the positive relationship between the price level and the supply of all goods produced in the economy. c. It shows the amount of real GDP consumed at different price levels. d. It is a negatively sloped curve that shows the relationship between the price level and the cost of production of firms in the economy. e. It shows the positive relationship between price and quantity supplied of an individual good.
The selling of a good or service abroad at a price below production costs is
A) marginal cost selling. B) price discrimination. C) price differentiation. D) dumping.