Three basic decisions must be made by all economies. What are they?
What will be an ideal response?
what will be produced, how goods will be produced, and for whom goods will be produced
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Assume that for a particular firm's output price = $80, marginal cost = $30, average total cost = $25. Based on this information, the firm's Lerner Index is equal to:
A) 0.313. B) 0.375. C) 0.6. D) 0.625.
Accountants do not often report economic profits on income statements and balance sheets because:
a. economic profits are exactly the same as accounting profits, and thus they do not need to be broken out in financial statements. b. the cost of capital, while easy to measure, is very difficult to report. c. it might make some firms look as though they possessed an unfair competitive advantage over other firms. d. the cost of equity capital is very difficult to measure, and opportunity costs vary from investor to investor. e. the concept of economic profit is not firmly established in economic theory.
The conventional fiscal policy to fight inflation is to ___________ while the conventional monetary policy is to ___________.
Fill in the blank(s) with the appropriate word(s).
In which case is velocity the highest?
a. the price level equals 4, the money supply equals 5,000 . and output equals 20,000. b. the price level equals 4, the money supply equals 20,000 and output equals 5,000. c. the price level equals 2, the money supply equals 5,000 . and output equals 20,000. d. the price level equals 2, the money supply equals 20,000 and output equals 5,000.