Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles
A. increases.
B. initially increases, then decreases.
C. decreases.
D. remains constant.
Answer: A
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If the price of its product falls below the minimum point on the AVC curve, the best a perfectly competitive firm can do is to
A) keep producing and incur an economic loss equal to its total variable cost. B) keep producing and incur an economic loss equal to its total fixed cost. C) shut down and incur an economic loss equal to its total variable cost. D) shut down and incur an economic loss equal to its total fixed cost.
If the potential money multiplier is 4, a $1 increase in demand deposits can potentially support $4 of demand deposits
Indicate whether the statement is true or false
If a corporation earns a profit, dividends must be paid
Indicate whether the statement is true or false
Discuss and explain what effect a reduction in the marginal propensity to consume has on the size of the multiplier
What will be an ideal response?