If a firm in a competitive industry is making no profit but still producing, it must be the case that
a. MC = MR > ATC
b. MC = MR < ATC
c. MC = ATC > MR
d. MC = MR = ATC
e. this situation is not possible
D
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Which of the following is a reason why the money demand curve might shift?
a. an increase in the interest rate b. a change in the money supply c. open market purchases of bonds by the Federal Reserve d. changes in the required reserve ratio e. new methods of making payments that replace money
Under which of the following market structures would the highest output of a particular good be produced?
a. perfect competition b. monopolistic competition c. oligopoly d. monopoly
The following question relate to a community that is circular in nature with a one mile circumference. There are 81 people evenly distributed around the lake where the town is built. The travel cost is $10 per mile, a restaurant costs $100 to set up, and the cost per meal is $2. Calculate the optimal number of restaurants without using the graph. Round off small residuals to the nearest whole number. Show your work.
What will be an ideal response?
When an effective price ceiling is removed, we would expect the price of the good to:
A. decrease and the quantity demanded to decrease. B. decrease and the quantity demanded to increase. C. increase and the quantity demanded to decrease. D. increase and the quantity demanded to increase.