If a monopolist incurs a large fixed cost that shifts its average total cost curve upward, the effect on price and output will be
a. price and output will both rise
b. price will rise and output will fall
c. the firm will lower its price so that elastic demand will raise revenues to cover the additional cost
d. the firm will pass the higher cost on to customers without changing the amount consumers will buy
e. there will be no effect on price or output
E
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Which of the following would be directly counted in GDP for 2015?
A) windows purchased from Pella in 2015 to be installed in a house built in 1945 B) windows built in 1945 which were salvaged from a 1945 house and are going to be used in a newly-built house C) windows built in 1945 which were salvaged from a 1945 house and are going to be used in a house built in 1950 D) none of the above
Khalil closes his ice cream stand for two days to attend a wedding. As a result, he can reasonably expect his firm’s short-run ______.
a. fixed costs to increase b. marginal costs to decrease c. total cost to increase d. variable costs to decrease
What will decrease SRAS?
a. improvements in technology b. increases in the capital shock c. decreases in consumer confidence d. increases in wages
According to Keynesians, an increase in the money supply will have its least impact on GDP when the aggregate demand curve intersects:
A. the horizontal portion of the aggregate supply curve. B. the vertical portion of the aggregate supply curve. C. the upward sloping portion of the aggregate supply curve. D. either the horizontal or upward sloping portion of the aggregate supply curve.