Long-run competitive equilibrium in an industry implies that no firm:
A. is producing at the output level where price equals long-run average total cost.
B. is earning accounting profits.
C. is earning a normal profit.
D. has an incentive to enter or exit the industry.
Answer: D
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When a production quota is used to remedy the problem of the commons, then
A) the production quota is set so that use of the resource is where marginal private benefit equals marginal private cost. B) the production quota is set so that use of the resource is where marginal social benefit equals marginal private cost. C) the market equilibrium, but not the efficient outcome, is achieved. D) all users of the resource have an incentive to cheat on the quota quantity.
Which of the following indices best signals future movements in retail prices?
a. The implicit GDP deflator b. nominal GDP c. The consumer price index d. The producer price index e. The measure of economic welfare (MEW)
Assume that the actual deficit is $150 billion with the economy well below potential output and that the level of economic activity rose to its potential level while tax revenues increased by $50 billion and transfer payments fell by $20 billion
Then, what is the structural deficit? a. $180 billion b. $120 billion c. $220 billion d. $80 billion e. $100 billion
Disney sold The Little Mermaid for $20 with a $5 mail in rebate. The rebate should have
A. inverted overall customer demand. B. stabilized overall customer demand. C. increased overall customer demand. D. reduced overall customer demand.