If firms are producing at a profit-maximizing level of output where the price is equal to the average total cost:
A. economic profits must be zero.
B. average total cost must be minimized.
C. accounting profits must be positive.
D. All of these are true.
Answer: D
You might also like to view...
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Suppose your expenses for this term are as follows: tuition: $9,000, room and board: $1,500, books and other educational supplies: $1,000
Further, during the term, you can only work part-time and earn $3,000 instead of your full-time salary of $8,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college? A) $10,000 B) $13,000 C) $15,000 D) $18,000
Monetarists believe that the private sector of our economy is inherently ______.
Fill in the blank(s) with the appropriate word(s).
The short-run Phillips curve relationship implies that the inflation rate
A. is higher when the natural unemployment rate is also higher. B. is constant regardless of the actual unemployment rate. C. is higher when the actual unemployment rate is also higher. D. is higher when the actual unemployment rate is lower.