Refer to the long-run cost diagram for a firm. If the firm produces output Q 2 at an average cost of ATC 2 , then the firm is:
A. producing the profit-maximizing output but is failing to minimize production costs.
B. incurring X-inefficiency but is producing that output at which all existing economies of scale
might be realized.
C. incurring X-inefficiency and is failing to produce the output at which all economies of scale
might be realized.
D. producing that output with the most efficient combination of inputs and is realizing all
existing economies of scale.
B. incurring X-inefficiency but is producing that output at which all existing economies of scale
might be realized.
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Where does the short-run Phillips curve intersect the long-run Phillips curve?
A) at the point where actual inflation is equal to expected inflation B) at the point where the rate of inflation and the unemployment rate are equal C) at the natural rate of inflation D) There is no intersection between the short-run and long-run Phillips curves.
When we describe stock prices as following a random walk, we mean that future changes in stock prices are
A) unpredictable. B) increasing. C) decreasing. D) constant.
Under some relative definitions, poverty will persist as long as income inequality does
Indicate whether the statement is true or false
A structural stagnation is a:
A. business cycle with smaller fluctuations around the trend. B. business cycle with greater fluctuations around the trend. C. slow expansion that involves slower growth than the previous long run trend. D. business cycle in which unemployment rises during the downturn and rises during the expansion.