As fiscal consolidation takes place, the central bank should
A) decrease the policy rate.
B) increase the policy rate.
C) increase inflation rate.
D) decrease money supply.
A
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In a competitive industry, each firm has a cost function 
(for a given set of input prices). Demand for the industry's output is 
. The (long run) equilibrium number of firms is
A. 120 B. 58 C. 46 D. 34 E. 29 F. 12 G. 2 H. None of the above
Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. At a quantity of 4,000 pounds
A) the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently low. B) the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently high. C) the marginal cost of pecans is greater than the marginal benefit; therefore, output is inefficiently low. D) producers should raise the price to $9 in order to sell the quantity demanded of 4,000.
If the total cost of producing 20 ceramic vases is $240, what is the average total cost of producing a single vase?
a. $240/20 = $12 b. $240 × 20 = $4,800 c. 20/$240 = $0.08 d. $240 – 20 = $220
Explain the differences between the two-country, two-commodity model with constant costs of production and the two-country, two-commodity model with increasing costs of production. Adequately describe the production-possibilities curves for each country in each case. Describe free-trade production and the degree of specialization in each country under both cost situations.
What will be an ideal response?