If the market price is $5 and you are currently producing at a level where average total cost is $3 and falling, you should:
A. produce until the average total cost and average revenue are equal.
B. shut down.
C. produce only enough to cover variable costs.
D. produce where MR = MC.
Answer: D
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Refer to the scenario above. The nominal GDP of the country in Year 1 was ________
A) $280,000 B) $2,200,000 C) $1,400,000 D) $540,000
Suppose the market supply is initially at S1 and a price ceiling is set at 8. If supply shifts from S1 to S2, then
A. The price ceiling will no longer bind.
B. The price ceiling will prevent output from changing.
C. The size of the shortage will increase.
D. The market will not reach equilibrium.
Banks responded to disintermediation by
A) supporting the elimination of interest rate regulations, enabling them to better compete for funds. B) opposing the elimination of interest rate regulations, as this would increase their cost of funds. C) demanding that interest rate regulations be imposed on money market mutual funds. D) supporting the elimination of interest rate regulations, as this would reduce their cost of funds.
A nation benefits from international trade if it
a. exports more than it imports. b. imports more than it exports. c. imports goods for which it is a low opportunity cost producer. d. exports goods for which it is a low opportunity cost producer.