A monopolistically competitive firm will always choose to produce where
A) marginal revenue equals marginal cost.
B) marginal cost meets the demand curve.
C) average total cost meets the demand curve.
D) average total cost is minimized.
A
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What are the three categories of correlation? Illustrate with real life examples
What will be an ideal response?
Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $9, what changes in the market would result in an economically efficient output?
A) The price would decrease, the demand would increase, and the supply would decrease. B) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would decrease. C) The price would decrease, the quantity supplied would decrease, and the quantity demanded would increase. D) The price would increase, the quantity demanded would decrease, and the quantity supplied would increase.
If a negative externality results from the refining of oil, the cost of production as seen by the oil refinery: a. does not include the external cost
b. includes the external cost. c. does not include the external benefit. d. includes the external benefit.
The figure below shows an IS-LM-FE model for an economy with fixed exchange rates. Initially the economy is at Point A, a triple intersection. Here, the FE curve is steeper than the LM curve.
If monetary authority is unable to sterilize, output will end up
A. at Y0. B. to the left of Y1. C. to the right of Y1. D. at Y1.