Government spending is a leakage out of the circular flow of income and spending.
Answer the following statement true (T) or false (F)
False
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A perfectly competitive firm is producing 50 units of output and selling at the market price of $23. The firm's average total cost is $20. What is the firm's economic profit?
A) $23 B) $150 C) $1,000 D) $1,150 E) $50
Refer to Figure 13-14. Which of the following statements describes the firm depicted in the diagram?
A) The firm is making no economic profit and will exit the industry. B) The firm is in long-run equilibrium and is breaking even. C) The firm is suffering an economic loss by producing at Q0 but will break even if it increases its output to Q1. D) The firm achieves productive efficiency by producing at Q0.
One way the government can encourage economic growth is to:
A. protect property rights. B. enforce contracts. C. ensure legal agreements will be upheld. D. All of these actions will encourage economic growth.
If the firms in a market reach an agreement about pricing and output shares, we would call this
A. a cartel. B. a dominant strategy. C. a Nash equilibrium. D. a duopoly.