Profit maximization occurs where
A) each factor is used up to the point where its marginal revenue product is equal to its marginal factor cost.
B) each factor is used up to the point where its marginal physical product is equal to its marginal factor cost.
C) average variable cost equals marginal cost.
D) average variable cost equals average total cost.
A
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The costs of inflation ________ when inflation is more rapid and ________ when inflation is more unpredictable
A) decrease; increase B) do not change; increase C) increase; increase D) increase; do not change E) increase; decrease
The idea that hysteresis plays a role in macroeconomics implies that
a. monetary policy can have an effect on the natural rate of unemployment. b. workers can overreact to changes in monetary policy. c. stabilization policy is ineffective and counterproductive. d. fiscal policy is ineffective and counterproductive.