There are currently 1,000 firms in a competitive industry. Minimum long-run average cost is $80 and price $100 . Explain what will happen to price, profit, and the number of firms in this industry over time
Price exceeds minimum long-run average cost, so that firms are earning an economic profit. This will induce additional entry over time. As the market supply increases (rightward shift), price will fall to minimum long-run average cost of $80 . Economic profit will drop to zero.
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Use the following graph, which shows an aggregate demand curve, to answer the next question. 
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Explain the externality generated when a shepherd grazes sheep in a field that is common property that several other shepherds use
What will be an ideal response?
When the Fed buys a Treasury bill from the public, how does it usually pay for the T-bill?
a. by writing a check on a commercial bank account b. by printing new Federal Reserve notes c. by creating new reserves in bank accounts d. by prepaying taxes into the Treasury's account
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A) it is currently in danger of defaulting on the debt. B) a large debt-to-GDP ratio causes crowding out. C) building roads and bridges do not yield enough benefits to justify their cost. D) the debt has to ultimately be paid off.