A good that has external benefits associated with its production will be
A. overproduced.
B. underproduced.
C. not produced.
D. produced at the optimal level.
Answer: B
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Fabulous Farms operates in a perfectly competitive market. Which of the following is required for Fabulous Farms to both maximize profits and achieve allocative efficiency?
A. P = MC B. P > MC C. P < MC D. P = MC – MR
The unemployment rate:
a. Always rises when the employment rate rises. b. Has more reliable components (in terms of measurability) than the employment rate. c. Is considered to be a poorer measure of business cycle activity than the employment rate. d. Tends to be more stable than the employment rate. e. None of the above.
If a firm shuts down in the short run, then its:
A. profit will equal zero. B. total revenue and total cost will fall to zero. C. economic loss will equal its fixed costs. D. economic loss will equal its variable costs.
The M1 money supply is composed of:
A. All coins and paper money held by the general public and the banks B. Bank deposits of households and business firms C. Bank deposits and mutual funds D. Checkable deposits and currency in circulation