If the economy is experiencing inflation, then the most appropriate government policy would be to:
A. shift the aggregate demand curve by using a tax increase coupled with spending cuts.
B. shift the aggregate demand curve by using a tax increase coupled with more spending.
C. shift the aggregate demand curve by using a tax cut coupled with spending cuts.
D. shift the aggregate supply curve by using a tax cut coupled with more spending.
Answer: A
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A perfectly competitive firm's marginal revenue
A) is greater than its price. B) is less than price because a firm must lower its price to sell more. C) is equal to its price. D) may be either greater or less than its price, depending on the quantity sold.
Refer to the graph below. When total revenue declines as output expands, demand is:
The following graph shows a total revenue curve for a monopolist.
A. Elastic
B. Inelastic
C. Perfectly inelastic
D. Perfectly elastic