Suppose a perfectly competitive increasing-cost industry is in long-run equilibrium when market demand suddenly decreases. What might happen to the typical firm in the long run?
a. It would experience no change from the original equilibrium
b. It would experience a higher equilibrium price
c. It would experience a lower equilibrium price
d. It would experience the same equilibrium price but would increase output
e. It would experience a lower average total cost and would increase output
C
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Laws that set maximum legal interest rates are called _____.
Fill in the blank(s) with the appropriate word(s).
A useful rule of thumb called the "Rule of 70" states that if something grows at a constant rate of Z percent per year, it doubles in size approximately every __________ years
A) 70 - Z B) 70/Z C) Z/70 D) 70 × (Z/100)
The dissolving of the _____________ in 1991 resulted in a "peace dividend" for the United States that enabled us to divert tens of billions of dollars a year from military spending to much more productive uses.
Fill in the blank(s) with the appropriate word(s).
Firm A and firm B both have total revenues of $200,000 and total costs of $250,000; firm A has total fixed costs of $40,000, while firm B has total fixed costs of $70,000. Which of the following statements are true in the short run?
A. Firm A should operate. B. Firm B should operate. C. Firm A should shut down. D. Firm B should shut down. E. both b and c