Due to the impact of increasing returns to scale, smaller firms can produce at a lower average total cost than larger firms
a. True
b. False
Indicate whether the statement is true or false
False
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The reason why self-correction works to close a recessionary gap is because: a. a labor shortage causes wages to increase. b. a labor surplus causes wages to increase. c. a labor shortage causes wages to fall
d. a labor surplus causes wages to fall. e. a labor surplus causes price to fall.
A price-discriminating firm will always maximize profit by following the condition that
A. MR > MC. B. MR > P. C. MRa = MRb = MC. D. MR = ATC.
A price floor creates a situation in which one party wins and another party loses, and the gains for the winner are equal to the losses for the loser
Indicate whether the statement is true or false
Refer to the above figure. If the current level of real GDP is $13 trillion, then the economy is experiencing
A. a fiscal deficit gap. B. a deflationary gap. C. an inflationary gap. D. a recessionary gap.