For consumers with a binding borrowing constraint, a decrease in the real interest rate ________
A) decreases consumption now, and in the future
B) increases consumption now, and in the future
C) decreases consumption now, and increases future consumption
D) has no impact on consumption
D
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A perfectly competitive firm faces a market clearing price of $150 per unit. Average variable costs are at the minimum value of $200 per unit at an output rate of 100 units. Marginal cost equals $150 per unit at an output rate of 75 units
It can be concluded that the short-run profit-maximizing output rate is A) 75 units, at which the firm earns zero economic profits per unit sold. B) 75 units, at which the firm earns $50 in economic profits per unit sold. C) 100 units, because marginal cost equals average variable costs. D) 0 units, because price is less than average variable costs.
For products like parking lots and hotels, the relevant costs and benefits for setting price are
a. LRMR and LRMC b. LRMR and SRMC c. SRMR and SRMC d. SRMR and LRMC