A firm should continue producing until
A. the cost of producing the output equals the revenues obtainable from selling the output.
B. average costs are at a minimum.
C. the average cost when another unit is produced equals the average revenue obtainable from selling the extra unit.
D. the cost of increasing output by one more unit equals the revenues obtainable from selling the extra unit.
Answer: D
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Because of the existence of the aggregate demand multiplier, a $10 billion change in expenditure
A) shifts the aggregate demand curve by more than $10 billion. B) shifts the aggregate demand curve by $10 billion. C) shifts the aggregate demand curve by less than $10 billion. D) changes the slope of the aggregate demand curve so it is less stee
If the price of hair styling increases, then
A) hair styling salons hire fewer workers but makes more profit. B) hair stylists demand an increase in wages and the salons hire fewer workers. C) the value of marginal product of each hair stylist increases and the demand curve for hair stylists shifts leftward. D) the value of marginal product of each hair stylist increases and the demand curve for hair stylists shifts rightward.
Because of international time lags between ordering and the receipt of goods, a depreciation of a currency:
a. will not change import or export volumes for a time, since prices on orders already placed cannot be renegotiated. b. will immediately change import and export volumes, because buyers and sellers always include an opt-out clause. c. will affect import and export volumes in third countries not party to the particular transaction. d. will never change import or export volumes.
If a decrease in the price of movie tickets increases the total revenue of movie theaters, this is evidence that demand is:
A. elastic. B. inelastic. C. unit elastic. D. perfectly inelastic.