When we compare PAE and actual output (Y) if PAE is greater than Y we expect that:
A. eventually production will decrease.
B. eventually production will increase.
C. the government will intervene by cutting down on taxes.
D. there will be no change in aggregate production.
Answer: B
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Katie finds that the marginal utility from a compact disc is 30 and the marginal utility from a pizza is 10. The price of a compact disc is $15 and the price of a pizza is $10. In order to increase her utility, Katie should
A) consume more compact discs and fewer pizzas. B) consume fewer compact discs and more pizzas. C) not change her consumption of pizza and compact discs. D) consume fewer compact discs and fewer pizzas.
When a firm is operating at its minimum efficient scale, its short-run average total cost of production is minimized
a. True b. False