In order to continue operating, in the long-run a firm must
a. Charge a price equal to its AVC
b. Charge a price equal to its AFC
c. Charge a price equal to its AC
d. None of the above
c
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If the government reduced the minimum wage and pursued contractionary monetary policy, then in the long run
a. both the unemployment rate and the inflation rate would be lower. b. the unemployment rate would be lower and the inflation rate would be higher. c. the unemployment rate would be higher and the inflation rate would be lower. d. the unemployment rate and the inflation rate would be higher.
Frank owns an apple farm and plans to spend 4 hours today picking apples. The number of apples he can pick per hour depends on the total number of hours he spends working in either the east orchard or the west orchard in the manner shown in the accompanying table below.Hours in East OrchardNumber of Apples Per HourHours in West OrchardNumber of Apples Per Hour140110232210325310420410 How should Frank divide his time between the east and the west orchard?
A. He should spend 1 hour in the east orchard and 3 hours in the west orchard. B. He should spend all 4 hours in the east orchard. C. He should spend 3 hours in the east orchard and 1 hour in the west orchard. D. He should spend 2 hours in east orchard and 2 hours in the west orchard.
The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Behavioral economics refers to the study of situations
A) where consumers and firms appear to make choices that are appropriate to reach their goals. B) where consumers and firms appear to value fairness when they make choices. C) where consumers and firms disobey the laws of demand and supply. D) where consumers and firms do not appear to be making choices that are economically rational.