Figure 9.1 shows the cost structure of a firm in a perfectly competitive market. If the firm's fixed cost increases by 3,000 due to a new government regulation:
A. the marginal cost curve shifts upward.
B. the average variable cost curve shifts upward.
C. the average total cost curve shifts upward.
D. None of these
Answer: C
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Consider a closed economy without the government. If the savings rate in the economy is 20% and the aggregate savings is $10,000, the aggregate consumption in the economy is:
A) $37,000. B) $45,000. C) $10,000. D) $50,000.
A supply schedule shows the relationship between:
a. demand and supply. b. supply and income. c. price and income. d. quantity supplied and price. e. income and quantity supplied.
Supply-siders argue that:
a. reductions in government spending cut infrastructure investment which hurts private sector investment. b. increases in government spending increase infrastructure investment which helps private sector investment. c. increases in government spending causes private sector investment to fall because the government pushes up interest rates. d. reductions in government spending cause private sector investment to fall because the government pushes up interest rates by borrowing. e. increases in government spending causes consumption spending to fall because the government purchases push up interest rates.
The long run success of a collusion a. Is limited by ease of entry into the industry
b. Is enhanced by ease of entry into the industry. c. Is unaffected by the ease of entry into the industry. d. Could be either limited by or enhanced by ease of entry into the industry.