When a monopolistically competitive firm lowers it price one bad thing happens to the firm. What is this "one bad thing" called?
A) the price effect B) the substitution effect
C) the output effect D) the income effect
A
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All else equal, when interest rates ________, the duration of a coupon bond ________
A) rise; falls B) rise; increases C) falls; falls D) falls; does not change
When a shortage occurs in the market for a good, quantity
A. demanded exceeds quantity supplied and the market mechanism pushes the price up, which in turn encourages more production and less consumption. B. supplied exceeds quantity demanded and the price falls, which encourages more production and less consumption. C. demanded exceeds quantity supplied and the market mechanism pushes the price down, which encourages more production and less consumption. D. supplied exceeds quantity demanded and the price rises, which encourages more production and less consumption.
The accountants hired by the Brookside Racquet Club have determined total fixed cost to be $75,000 . total variable cost to be $130,000 . and total revenue to be $125,000 . Because of this information, in the short run, the Brookside Racquet Club should
a. shut down because staying open would be more expensive. b. lower their prices to increase their profits. c. stay open because shutting down would be more expensive. d. stay open because the firm is making an economic profit.
If the nominal wage is $10 per hour and the expected price level is 2 and the actual price level is 4, then:
a. the expected real wage rate is greater than the actual real wage rate. b. the expected real wage rate is greater than the actual nominal wage rate. c. the expected real wage rate is less than the actual real wage rate. d. the actual real wage rate is greater than the actual nominal wage rate.