Consider a competitive market with a large number of identical firms. The firms in this market do not use any resources that are available only in limited quantities. In long-run equilibrium, market price is determined by
a. the minimum point on the firms' average variable cost curve.
b. the minimum point on the firms' average total cost curve.
c. the portion of the marginal cost curve below average variable cost.
d. a firm's level of sunk costs.
b
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Educational services provided by public schools are:
A. excluded from GDP because they are intermediate goods. B. included in GDP at market prices. C. excluded from GDP because they are not sold in markets. D. included in GDP at cost.
Economists study
A) the choices people make, but not the consequences of their choices. B) the consequences of peoples' choices, but not the choices themselves. C) the choices people make in a world where resources are scarce. D) theories and ignore all the facts. E) data rather than people.
Suppose the Fed's primary goal is price stability and it aims to keep the inflation rate at 2%. If the inflation rate rose above 2%, what should it do?
A) pursue an expansionary monetary policy B) pursue a contractionary monetary policy C) reduce the required reserve ratio D) impose a temporary ceiling on the federal funds rate
What is the income effect for leisure demand?
What will be an ideal response?