For a firm that sells an information product, the long-run equilibrium exists at a point at which economic profits are
A. zero.
B. positive.
C. negative.
D. dependent upon the particular product.
Answer: A
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According to the income effect, when the price of a good increases, consumers ______.
a. switch to another similar good b. buy less of it due to their budget constraints c. gain less utility from that good d. experience consumer equilibrium
Which of the following equations is true of a profit-maximizing firm?
A) Wage = value of worker's marginal product B) Wage = worker's marginal product C) Wage = worker's total product D) Wage = average product of all workers
When Starbucks accepts your $10 bill for two Grande Lattes and one Tall Caramel Macchiato, the $10 bill serves as a
A) medium of exchange. B) store of value. C) standard of value. D) commodity money.
Assume that supply decreases slightly and demand decreases greatly. Which of the following will happen?
a. Equilibrium price will fall and equilibrium quantity will rise. b. Equilibrium price will rise and equilibrium quantity will fall. c. Equilibrium price will rise and equilibrium quantity will rise. d. Equilibrium price will fall and equilibrium quantity will fall. e. Neither equilibrium price nor equilibrium quantity will change.