The firm earns an economic profit whenever
a. price is less than average total cost
b. marginal revenue exceeds total revenue
c. average variable cost exceeds total revenue
d. marginal cost minus average cost is positive
e. price is greater than average total cost
E
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
The evidence on the question of Head Start effectiveness suggests that
A. Head Start children have an advantage over equally-situated children on first-grade tests of reading and verbal skill. B. Head Start children have an advantage over equally-situated children on tenth-grade tests of reading and verbal skill. C. there is no effect of the program whatsoever. D. Head Start children have an advantage over equally-situated children on the SAT.
The state of consumer optimum is reached when the consumer's
A) total utility/marginal utility ratio for all items is equal. B) total utility/price ratio for all items is equal. C) marginal utility for a product is zero. D) marginal utility/price ratios for all items are equal.
The quintessential example for the price of another potential output and the impact of the price of one good on the market for another is
A. corn and soybeans. B. 7up and sprite. C. hotdogs and hotdog buns. D. crude oil and gasoline.