In the _________, if profits are not possible, the perfectly competitive firm will seek out the quantity of output where _____________________.
a. long run; production increases
b. short run; fixed costs can be reduced
c. short run; losses are smallest
d. long run; fixed costs can be eliminated
c. short run; losses are smallest
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If average cost is falling, then marginal cost must be less than average cost.
Answer the following statement true (T) or false (F)
Why are public goods provided by the government, rather than by the private sector?
A) because they are large-scale projects that require the kind of financing only governments can generate through the issuance of bonds B) because it would be difficult for a private sector firm to make a profit providing a public good, since consumers who benefit would not have to pay for it C) because no one really benefits from public goods D) because private sector firms do not have the foresight to plan for public goods
Which of the following is an example of a positive economic statement?
A) The U.S. public should devote more resources to education. B) The poor should pay lower taxes and the rich should pay higher taxes. C) Soap operas should be taken off television. D) If you drop a ball from the top of a building, it will fall to the ground.
According to a theory that relies on the rational expectations hypothesis and the assumption that wages and prices are flexible, why do anticipated expansionary monetary actions NOT boost real GDP?
A. The short-run aggregate supply curve shifts upward simultaneously with the rightward shift of aggregate demand. B. The higher interest rates associated with anticipated expansionary monetary policy actions will dampen investment spending. C. Anticipated expansionary monetary policy actions do not increase aggregate demand. D. The short-run aggregate supply curve shifts downward simultaneously with the upward shift of aggregate demand.