Government expenditures on goods and services have an indirect impact on the aggregate demand, while taxes have a direct impact
a. True
b. False
Indicate whether the statement is true or false
False
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In monopolistic competition, when firms make an economic profit
A) the existing firms continue to make an economic profit in the long run because of product differentiation. B) new firms enter the industry so that the price falls and the economic profit eventually falls to zero. C) new firms enter the industry so that output decreases and the economic profit increases. D) new firms enter the industry so that output increases and the economic profit increases.
Your boss explains to you that the total fixed costs of the company are $1 million. He also informs you that each unit of production will cost twenty five cents more with each 100-unit increase
He has asked you to draw the fixed costs of the company with costs on the vertical axis and quantity of goods sold on the horizontal axis. Without drawing a graph tell your boss what the graph will look like using words. What information did your boss give you that you didn't need in order to draw the graph?
Price ceilings cause
a. Some suppliers to drop out of the market as they cannot charge the price they were earlier charging b. A reduction in the quality of the product c. The creation of black markets d. All the above
If the cost of capital increased to 25%, does the firm invest in the printer?
a. Yes because the NPV>0 b. Yes because the NPV=0 c. Need information on the marginal benefits and costs d. No because the NPV<0