A perfectly competitive firm's short-run supply curve is
A) upward sloping and is the portion of the marginal cost curve that lies above the average total cost curve.
B) upward sloping and is the portion of the marginal cost curve that lies above the average variable cost curve.
C) perfectly elastic at the market price.
D) horizontal at the minimum average total cost.
Answer: B
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If an economy produced 60 pounds of sushi at $12 per pound and 15 gallons of sake at $30 per gallon, the total value of these goods and services would be
A) $450. B) $720. C) $1,170. D) $2,700.
A conclusion of the theory of rational expectations is that, in the short run, the impact of discretionary fiscal policies designed to shift the AD curve will:
a. result in no net change in AD once people's expectations adjustments have been accounted for b. shift AD in the opposite direction intended once people's expectations adjustments have been accounted for. c. be anticipated and compensated for, causing no significant effect on real or nominal GDP or employment. d. have to be a surprise to change real output in the intended direction.