Suppose that price is below the minimum average total cost (ATC) but above the minimum average variable cost (AVC) and that the market price is expected to rise at least to ATC in the near future. In the short run, a firm that is a price taker would
a. immediately shut down and get out of the industry.
b. continue to produce a quantity such that marginal revenue equals marginal cost.
c. shut down temporarily, in hopes of restarting in the near future.
d. cut price and expand output in hopes of achieving economies of scale
B
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For a tax to be successful, the tax base must be ¬¬¬_____
a. easy to measure and monitor b. large c. inelastic d. able to expand in times of crisis
Stock markets deal
a. almost exclusively in newly issued stocks. b. in previously issued stocks. c. in both newly issued and previously issued stocks, but they do not deal in bonds. d. in large amounts of both newly issued and previously issued stocks and bonds.
An increase in the federal funds rate should:
A. cause the mortgage rates to increase by more than the increase in the federal funds rate. B. cause mortgage rates to increase by less than the increase in the federal funds rate. C. not impact mortgage rates since the federal funds rate is a very short-term rate. D. have an inverse impact on mortgage rates.
A scholarship gives you $1,000 today and promises to pay you $1,000 one year from today. What is the present value of these payments?
a. $2,000/(1 + r)2. b. $1,000 + $1,000/(1 + r) c. $1,000/(1 + r) + $1,000/(1 + r)2 d. $1,000(1 + r) + $1,000(1 + r)2