In long-run equilibrium, which of the following is not equal to price for a perfectly competitive firm?
a. Short-run average variable cost.
b. Long-run average total cost.
c. Short-run marginal cost.
d. Short-run average total cost.
a
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The table above gives four production possibilities for airplanes and cruise ships. In possibility A, how many resources are devoted to the production of cruise ships?
A) 0 B) few C) most D) all E) It is impossible to tell without more information about the prices of airplanes and cruise ships.
Which of the following statements is true about monopolistically competitive firms?
A) Like perfectly competitive firms, monopolistically competitive firms are not able to raise prices without losing all of their customers because they face competition from firms selling similar products. B) Unlike perfectly competitive firms, monopolistically competitive face perfectly inelastic demand curves. C) Like perfectly competitive firms, monopolistically competitive firms maximize their profits by setting price equal to marginal cost. D) Unlike perfectly competitive firms, monopolistically competitive firms are able to raise their prices without losing all of their customers.
If there is a shortage in the market for automobiles, then
a. producers' inventories will rise b. the price should begin to rise c. the demand curve will shift to restore equilibrium in the market d. the supply curve will shift to restore equilibrium in the market e. the price is expected to fall
Which of the following is an example of an automatic stabilizer?
a. Congress legislates lower tax rates to increase consumption and investment. b. Tax rates are increased during a recession to maintain a balanced budget. c. A regressive income tax system reduces tax revenues (as a share of income) as income expands. d. Revenues from the corporate income tax increase sharply during a business boom but decline substantially during a recession, even though no new tax legislation has been enacted.