Refer to the figure. Assuming this market is representative of the economy as a whole, a positive demand shock will:
A. increase both the price level and the quantity of output produced.
B. increase output but leave prices unchanged.
C. lower the price level but leave output unchanged.
D. raise the price level but leave output unchanged.
B. increase output but leave prices unchanged.
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A company finds that at its present level of production, MR = MC at $14, MC = AVC at $15, and MC = ATC at $20. Your advice to the firm regarding its short-run operations is
A) to continue production, as it is earning an economic profit of $1 per unit. B) to continue production, as it is earning an economic profit of $6 per unit. C) to shut down. D) to continue production at a loss.
Successful foreign aid programs:
A. enhance a DVC's resources and therefore shift its production possibilities curve to the left. B. enhance a DVC's resources and therefore shift its production possibilities curve to the right. C. move the DVC from a high-investment-low-consumption position to a low-investment-high- consumption position on its stable production possibilities curve. D. cause a DVC's exchange rate to depreciate.