What do we need to assume about firms in the sticky price model?
A) They accommodate any demand at the given price.
B) They hire until the real wage equals the average labor productivity.
C) They maximize only current profits.
D) They adapt the price to current conditions.
A
Economics
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Refer to Figure 11-4. Suppose the per-worker production function in the figure above represents the production function for the U.S. economy
If the United States decided to cut its support of university research in half, this would cause a movement from A) B to E. B) B to D. C) B to A. D) B to C.
Economics
If the average cost of producing a good is increasing as a firm produces more of the good, then which of the following must be TRUE?
A) AFC is falling. B) AVC is rising. C) MC > AVC. D) All of the above.
Economics