In a perfectly competitive market, a firm in long-run equilibrium will be operating
A) to the right of the minimum of the long-run average cost curve.
B) to the left of the minimum of the long-run average cost curve.
C) at the minimum of the long-run average cost curve.
D) at the minimum of the marginal cost curve.
Answer: C
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If the consumer price index in 2007 is 25 times that of 1860, and a slave cost $2,000 in 1860, how much is that in terms of 2007 dollars?
a. $12,500 b. $25,000 c. $50,000 d. $75,000 e. $750,000
As the price of dvds is raised from $3 to $5, their quantity demanded fell from 200,00 . to 180,000 . The elasticity of demand of dvds is:
a. 0.21 b. 1.28 c. 3.52 d. .65
In a perfectly competitive industry, assume there is a permanent increase in demand for a product. The process of transition to a new long-run equilibrium will include:
a. the exit of firms. b. temporarily lower production costs. c. both a and b. d. neither a nor b.
Following an unexpected decline in aggregate demand, once production cutbacks start offsetting rising inventory levels:
a. the aggregate demand curve will shift to the right. b. the aggregate supply curve will shift to the left. c. the economy will return to its natural rate of unemployment. d. the short-run Phillips curve will shift to the right. e. the economy will face both higher inflation and a higher unemployment rate.