In the above figure, if the firm is producing Q2 units at a price P2, it should
A) increase output and decrease price.
B) decrease output and increase price.
C) not change output or price.
D) shut down.
C
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Assuming all else equal, any change that causes a decrease in the credit supply at a given real interest rate will cause:
A) the credit supply curve to shift to the right. B) an upward movement along the credit supply curve. C) a downward movement along the credit supply curve. D) the credit supply curve to shift to the left.
Using the definition of unemployment, which of the following individuals would be unemployed?
A) A full-time student quits school, enters the labor market for the first time, and searches for employment. B) Because of the increased level of automobile imports, an employee of General Motors is laid off but expects to be called back to work soon. C) Because of a reduction in the military budget, your next door neighbor loses her job in a plant where nuclear warheads are made and must look for a new job. D) All of these individuals are unemployed.