If a firm suffers an economic loss, its:
A. price is less than its marginal cost.
B. price is less than its marginal revenue.
C. price is less than its average total cost.
D. None of these
Answer: C
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
By selling additional wheat, each U.S. wheat farmer
A) decreases his total revenue because the demand for his wheat is elastic. B) decreases his total revenue because the demand for his wheat is inelastic. C) increases his total revenue because the demand for his wheat is elastic. D) increases his total revenue because the demand for his wheat is inelastic.
In the long run, a perfect competitor
A) earns positive profits but will not make losses. B) earns positive economic profits. C) earns zero economic profits. D) produces at its shutdown point.
If required reserves are expressed by RR; the required reserve rate by rD and deposits by D, the simple deposit expansion multiplier is expressed as:
A. 1/rD. B. RR × D. C. RD × D. D. (1/rD ) D.