Suppose a price-taking firm produces 400 units at its optimal output level. At that output rate marginal cost is $200, average total cost is $240, and average variable cost is $170 . What can you determine about the market price that would force the firm to shut down in the short run?
a. It equals $200.
b. It is between $170 and $240.
c. It is less than $170.
d. It is between $170 and $200.
e. It equals $240.
C
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If a larger fraction of the adult population is working in the marketplace, household production
A) counted in real GDP increases. B) not counted in real GDP increases. C) counted in real GDP decreases. D) not counted in real GDP decreases.
If people leave bequests primarily because they are uncertain about the timing of their deaths,
A) the marginal propensity to consume out of a temporary change in income would tend to be higher than in the simple version of the LCH. B) unrealized capital gains from higher housing prices will probably lead to a higher consumption-to-income ratio than in the simple version of the LCH. C) increases in wealth from the stock market would be consumed over a longer time horizon than in the simple version of the LCH. D) A and C are both correct.