In the short run, a firm operating in a competitive industry will produce the quantity of output where price equals marginal cost as long as the
a. price is less than average total cost.
b. marginal revenue exceeds the marginal cost.
c. price is greater than average variable cost.
d. price is greater than average fixed cost but less than average variable cost.
c
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Any improvement in overall production technology that permits more output to be produced with the same level of inputs causes
A) a movement up the supply curve resulting in both a higher equilibrium price and quantity. B) a rightward shift of the supply curve so that more is offered at each price. C) no movement of the supply curve, but a fall in price and a decrease in quantity supplied. D) a leftward shift of the supply curve so that less is offered for sale at each price.
You are the liaison between the Federal Reserve Board and the U.S. Treasury Department. Your goal is to coordinate policy efforts to achieve full-employment output in the economy while keeping a fixed real interest rate. You must recommend tightening or easing both monetary and fiscal policies to do this. What would your recommendation be in each of the following situations?(a)People decide to increase saving.(b)Expected inflation declines.(c)The future marginal productivity of capital declines.(d)There's an adverse oil price shock in which the LM curve moves farther to the left than does the FE line.
What will be an ideal response?
In the above figure, if D2 is the original demand curve and consumers come to expect that the price of the good will rise in the future, which price and quantity might result?
A) point a, with price P2 and quantity Q2 B) point b, with price P1 and quantity Q1 C) point c, with price P3 and quantity Q3 D) point d, with price P1 and quantity Q3
Graphically illustrate and explain what effect a purchase of bonds by the Federal Reserve will have on the money market
What will be an ideal response?