By convention, there are two major divisions of economics, called:

A. rational economics and irrational economics.
B. microeconomics and macroeconomics.
C. reservation price and opportunity cost.
D. marginal benefit and marginal cost.


Answer: B

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Suppose you observe an increase in the equilibrium price of coffee and a decrease in the equilibrium quantity of coffee. Of the options listed below, this is most consistent with:

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If a perfectly competitive firm is currently producing where P = MC and MC = ATC, then the firm will earn ________ profits.

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