Given the above graph, the competitive firm's short-run supply curve is the:
A. MC curve above F.
B. MC curve above J.
C. MC curve above G.
D. MC curve above H.
Answer: C
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Product differentiation involves making a product that is
A) slightly different from the products of competing firms. B) no different than the products of competing firms. C) very different from the products of competing firms. D) completely different from the products of competing firms. E) cheaper than the products of competing firms.
Suppose the economy is in long-run equilibrium. In a short span of time, there is a large influx of skilled immigrants, a major new discovery of oil, and a major new technological advance in electricity production. In the short run, we would expect
a. the price level to rise and real GDP to fall. b. the price level to fall and real GDP to rise. c. the price level and real GDP both to stay the same. d. All of the above are possible.
The money demand curve has a negative slope because
A) lower interest rates cause households and firms to switch from money to financial assets. B) lower interest rates cause households and firms to switch from financial assets to money. C) lower interest rates cause households and firms to switch from money to stocks. D) lower interest rates cause households and firms to switch from money to bonds.
In the Keynesian model, suppose the Fed sets a target for the money supply. If the IS curve shifts to the left, and the Fed wants to keep output unchanged, what should the Fed do?
A. Reduce taxes. B. Increase taxes. C. Reduce the money supply. D. Increase the money supply.