Last year the price level increased from 118 to 122. The increase in the price level leads to a decrease in

A) potential GDP.
B) the money wage rate.
C) the buying power of money.
D) the real interest rate.
E) the price of domestic goods and services relative to foreign goods and services.

C

Economics

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Suppose a company increases production from a point where marginal cost equals average total cost to a point where marginal revenue and marginal cost are equal. Is it a good idea for the company to do this? Why? a. No; average total costs have increased which means the company is not minimizing losses

b. Yes; because average variable costs are always less than average total costs. c. No; because the marginal cost of producing the last unit is the same as the marginal revenue. d. Yes; even though the previous level of output had minimized the average total cost, there was still profit to be earned by producing additional units. e. No; the previous level of output was the most efficient because it had the lowest average total cost.

Economics

In the above table, the marginal product of the second worker is

A. 68. B. 38. C. 98. D. It cannot be determined.

Economics