A regulatory agency that imposes a price ceiling in order to limit monopoly profits to a "fair rate of return" is forcing the monopolist to sell at a price equal to
a. average fixed cost.
b. average total cost.
c. marginal cost.
d. average variable cost.
B
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Given the total cost function TC = 100 + 40Q - 15Q2 + 5Q3, calculate the
a. average fixed cost function (AFC) b. average variable cost function (AVC) c. marginal cost function (MC)
The equation of exchange is an ________ while the quantity theory of money is a theory that ________
A) accounting identity; assumes the money supply is constant B) accounting identity; assumes velocity is held constant C) accounting theory; assumes the price level is constant D) accounting theory; economists use to explain changes in real GDP
In long-run equilibrium, the perfectly competitive firm sets its price equal to which of the following?
a. Short-run marginal cost. b. Long-run average cost. c. All of the answers are correct. d. Short-run average total cost.
The principle of comparative advantage
A. applies only when the gold standard is in effect. B. is the basic reason that the United States has been running trade deficits. C. states that it is advantageous to export more than you import. D. states that total output is greatest when each product is made by the country that has the lowest opportunity cost.