Refer to Figure 12-7. If the market price is P1
A) The firm will experience a loss since price is less than ATC.
B) The firm will experience a loss and raise its price to P2. The firm will then break even.
C) The firm may make a profit if it can increase the demand for its product.
D) The firm will break even by producing a quantity of Q2.
A
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The price level is:
A. a measure of overall prices at a particular point in time. B. the price of a specific good in comparison to the prices of other goods and services. C. the percentage change in a price index such as the CPI. D. the rate of inflation.
The most liquid measure of money supply is
A) M0. B) M1. C) M2. D) M3.
Suppose Fred honestly tells the car dealer that the maximum amount he's willing to pay for a Ford Escort is $12,000 . The dealer says, "You're in luck! We have one on the lot for $12,000.". Which of the following statements is true?
a. The dealer's consumer surplus is $12,000. b. Fred and the dealer share $12,000 of consumer surplus. c. Fred's consumer surplus is $12,000. d. Fred receives no consumer surplus. e. The car is not worth $12,000.
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.