T-Shirt Enterprises is selling in a purely competitive market. It is producing 3000 units, selling them for $2.00 each. At this level of output, the average total cost is 2.50 and the average variable cost is $2.20. Based on these data, the firm should:
A. Shut down in the short run
B. Decrease output to 2500 units
C. Continue to produce 3000 units
D. Increase output to 3500 units
A. Shut down in the short run
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When a $10 check written on the First National Bank of Chicago is deposited in an account at Citibank, then
A) the liabilities of the First National Bank increase by $10. B) the reserves of the First National Bank increase by $ 10. C) the liabilities of Citibank increase by $10. D) the assets of Citibank fall by $10.
Holding other factors constant, a decline in incomes of Europeans will result in a ________ curve in the United States, reducing real GDP relative to potential GDP
A) leftward shift of the IS B) rightward shift of the IS C) upward shift of the MP D) downward shift of the MP
One of the major points of the circular flow diagram is:
a. If GDP rises due to increased production, incomes earned from producing GDP must rise. b. Increasing gross private domestic investment is the best way for a nation to grow. c. Increasing government spending is the best way for a nation to grow. d. The top and bottom flows are proof that most economies should always be in equilibrium. e. None of the above.
An increase in price will result in a decrease in the quantity supplied.
a. true b. false