In contrast to a perfectly competitive firm, a monopolist earns:
a. negative economic profit in the long run.
b. zero economic profit in the long run.
c. positive economic profit in the long run.
d. positive economic profit in the short run.
c
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A rising short-run average variable cost of production for a firm indicates that
A. marginal cost is below average variable cost. B. average fixed cost is constant. C. marginal cost is above average variable cost. D. average total cost is at its maximum.
How has growth in M2 minus the growth in real GDP compared to the inflation rate in the United States?
What will be an ideal response?
The biggest conceptual difference between using VARs for forecasting and using them for structural modeling is that
A) you need to use the Granger causality test for structural modeling. B) structural modeling requires very specific assumptions derived from economic theory and institutional knowledge of what is exogenous and what is not. C) you can no longer use the information criteria to decide on the lag length. D) structural modeling only allows a maximum of three equations in the VAR.
Many economic models are not sufficiently detailed to make precise numerical predictions. What, then, is the value of such models?
What will be an ideal response?