If AC < p where MR = MC
A) firms earn positive profits and new firms will enter.
B) firms earn negative profits and existing firms will leave.
C) firms earn zero profits and new firms will not enter and no existing firms will leave.
D) None of the above.
A
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Refer to the scenario above. What is Wendy's opportunity cost of producing one greeting card?
A) 0.25 earrings B) 0.5 earrings C) 1 earring D) 2 earrings
Under a fixed exchange rate system, if the government decides to devalue its currency, net exports will ________ and the IS curve will shift to the ________
A) increase; left B) increase; right C) decrease; left D) decrease; right
During a stock market bubble, the price/earnings [P/E] ratio:
a. hits high levels. b. falls to zero. c. becomes negative. d. remains constant. e. declines to a very low level.
A rise in the price of foreign inputs leads to a
A) rightward shift of the AD curve. B) leftward shift of the AD curve. C) rightward shift of the SRAS curve. D) leftward shift of the SRAS curve.