Refer to the graphs shown, which depict a perfectly competitive market and firm. If market demand decreases from D0 to D1:
A. market price remains at P0 because perfectly competitive firms can't earn positive economic profit.
B. the firm's output remains at q1 because perfectly competitive firms can't earn positive economic profit.
C. market price falls from P0 to P1 and the firm's output rises from q0 to q1.
D. market price falls from P0 to P1 and the firm's output falls from q1 to q0.
Answer: D
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Which of the following statements is true?
A) The production possibilities curve of a nation is fixed in the long run. B) The production possibilities curve can only shift to the right. C) The production possibilities curve of an economy is concave to the origin. D) The slope of the production possibilities curve represents the ratio of the marginal cost of producing goods.
When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the bank chooses not to make any loans but to hold excess reserves instead, then, in the bank's final balance sheet
A) the assets at the bank increase by $1 million. B) the liabilities of the bank decrease by $1 million. C) reserves increase by $200,000. D) liabilities increase by $200,000.
A rise in the interest rate tends to
a. reduce many kinds of spending b. stimulate investment in high-profit industries c. cause bond prices to increase d. encourage confidence in the Fed's control over the economy e. suggest a downturn in the economy is coming within 6 months
For about the last 45 years, state and local taxes have remained relatively constant as a percentage of GDP
a. True b. False Indicate whether the statement is true or false