A condition in a market where there is no upward or downward pressure on price is called
A) a shortage.
B) a surplus.
C) market equilibrium.
D) All of the above are possible correct answers.
C
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The equation of exchange states that the quantity of money multiplied by the number of times this money is spent in a given year must equal
A) nominal income. B) real income. C) real gross national product. D) velocity.
The perfectly competitive firm faces
A) a downward sloping demand curve. B) a horizontal supply function. C) perfectly elastic demand. D) constant marginal costs.
Beth recently began running her husband's lumber mill. Last month she took in $5,000 in sales revenue and paid $3,400 in out-of-pocket costs. She made an economic profit last month if her implicit costs were:
a. $1000. b. $1600. c. $2400. d. $3300.
Expectations of asset values by participants in financial markets
A) are not possible to model, given the current state of economic knowledge. B) determine market prices, but are not related to changes in market prices. C) generally do not change. D) determine current market prices and changes in market prices.