In the long run, a perfect competitor
A) earns positive profits but will not make losses.
B) earns positive economic profits.
C) earns zero economic profits.
D) produces at its shutdown point.
Answer: C
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If the nominal interest rate is greater than the real interest rate,
A) it is an indication of economic growth. B) inflation must be occurring. C) lenders must lose because they can only make loans using the real interest rate. D) the real interest rate must be negative. E) None of the above answers is correct because it is not possible for the nominal interest rate to exceed the real interest rate.
All of the following are possible consequences of noise traders EXCEPT
A) increased volatility in the financial market. B) asset prices differing from fundamental values. C) herd behavior contributing to speculative bubbles. D) reduced volatility of asset prices.
If your real disposable income goes up by $1,000 per week, and your real consumption spending goes up by $800 per week, you have a marginal propensity to consume of
A) 0.2. B) 0.8. C) 1.2. D) 1.0.
In a competitive industry, the industry's short-run supply curve is
A. the vertical sum of the marginal cost curves. B. the horizontal sum of the marginal cost curves. C. determined by the average variable cost curve. D. determined by the average total cost curve.