Exhibit 8-16 Short-run cost curves for a competitive firm
In Exhibit 8-16, if the market price of its product is $50 per unit, then the firm will:

If disposable income increases from $5 trillion to $6 trillion and, as a result, consumption expenditure increases from $7 trillion to $7.8 trillion, the MPC is

A) 1.0. B) 6 ÷ 7 = 0.86. C) 6 ÷ 7.8 = 0.77. D) 5 ÷ 7 = 0.71. E) 0.8.

When the government imposes a tariff on imported goods, it _____________ prices for domestic consumers, ________________ consumers' surplus and _________________ the producers' surplus for domestic producers

A) raises; lowers; raises B) lowers; raises; raises C) lowers; raises; lowers D) raises; lowers; lowers E) none of the above