In a perfectly competitive market, when price is equal to the
A. Minimum average variable cost, economic profit is zero.
B. Minimum average total cost, economic profit is zero.
C. Minimum short-run average total cost, it has reached the shutdown point.
D. Marginal cost, accounting profit is maximized.
Answer: B
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Unlike the minimum wage, the Earned Income Tax Credit does not:
A. create an incentive for employers to lay off low-wage workers. B. improve the economic well-being of the working poor. C. increase total economic surplus. D. cost the government money.
When two variables move in opposite directions, they are said to be:
A) uncorrelated. B) positively correlated. C) negatively correlated. D) directionally correlated.
When a government has a budget surplus, the surplus
A) helps finance investment. B) crowds-out private saving. C) must be subtracted from private saving to get total saving. D) increases the world real interest rate.
"An Inquiry into the Nature and Causes of the Wealth of Nations" published in 1776 was written by
A) Alfred Marshall. B) Karl Marx. C) John Maynard Keynes. D) Adam Smith.