Suppose the firm's total revenue is $4,000 and its total cost is $1,200 . We know, then, that the firm
a. should produce more to maximize profit
b. should lower its price to maximize profit
c. should lower average total cost to maximize profit
d. should stay where it is because it's maximizing profit
e. can't determine what it should do with that incomplete information
E
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Suppose the marginal propensity to consume is 0.8. According to the model in the text, how much would equilibrium output go up if the government increased spending by $500 million (assuming all other factors are held constant)?
Select one: a. $400 million b. $625 million c. $900 million d. $2,500 million
The mercantilism policy failed to generate gains from trade for countries which adopted it because of: a. increases in consumer spending
b. high levels of federal debt. c. supply-side shocks from the oil-exporting countries. d. runaway inflation in the U.S. e. retaliations from other countries.