In monopolistic competition, in the short run a firm maximizes its profit by selecting an output at which marginal cost equals
A) average total cost.
B) marginal revenue.
C) price.
D) zero.
B
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If expectations about future income change, there is
A) a decrease saving if people expect income to decrease in the future. B) a decrease in saving if people expect income to increase in the future. C) an increase in saving if people expect income to increase in the future. D) no change in saving until income actually changes. E) a change in the quantity of loanable funds supplied and a movement along the supply of loanable funds curve.
The non-democratic character of the Board of Governors of the Federal Reserve System helps support ________
A) the political business cycle B) the time-inconsistency problem C) its independence D) rational expectations of Federal Reserve behavior
If a firm in a perfectly competitive market faces a market price of $7, and it decides to increase its production from 4,000 to 12,000 units, the firm's marginal revenue will:
A. stay the same. B. rise once diminishing marginal product sets in. C. increase from $28,000 to $84,000. D. diminish once diminishing marginal product sets in.
A legally mandated minimum wage is an example of:
A. the invisible hand principle. B. a price floor. C. a price ceiling. D. a fringe benefit.