If a perfectly competitive firm’s average total cost curve is above its demand schedule at every level of output, then the firm will earn _______ profits.
A) positive
B) breakeven
C) negative
D) zero
C) negative
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In the averting expenditures model shown below, if environmental quality is E1,and personal environmental quality is X1, the area or distance that represents the individual’s averting expenditures is
a. edfX1 b. edhX2 c. dgh d. edfhX2
In the Harrod-Domar growth model, if 12.5% of income is saved, the incremental capital output ratio is 2.5 and the rate of depreciation is 4%, what is the implied rate of growth?
What will be an ideal response?
In calculating the GDP, national income accountants:
A. treat inventory changes as an adjustment to personal consumption expenditures.
B. ignore inventories because they do not represent final goods.
C. subtract increases in inventories or add decreases in inventories.
D. add increases in inventories or subtract decreases in inventories.
Use the following graph for a pure monopoly operating in the short run to answer the next question.
At the profit-maximizing level of output, this firm ________.
A. faces a total fixed cost equal to the area of BEFC B. should shut down C. generates a loss per unit equal to DE D. generates an economic profit equal to the area of ABED