Refer to Figure 13-14. Which of the following statements describes the firm depicted in the diagram?
A) The firm is making no economic profit and will exit the industry.
B) The firm is in long-run equilibrium and is breaking even.
C) The firm is suffering an economic loss by producing at Q0 but will break even if it increases its output to Q1.
D) The firm achieves productive efficiency by producing at Q0.
B
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If you deposit $500 into a savings deposit, the immediate effect (do not consider the money multiplier which we will study in the next chapter) is:
a. M1 rises, M2 falls, and the monetary base remains the same. b. M1 falls, M2 remains the same, and the monetary base remains the same. c. M1 rises, M2 rises, and the monetary base remains the same. d. M1, M2, and the monetary base rise. e. M1, M2, and the monetary base fall.
If the demand for gadgets increases as a result of a decrease in the price of widgets, the widgets and gadgets are:
A. elastically demanded. B. substitute goods. C. normal goods. D. complementary goods.
When the interest rate is high, planned investment is ________ so output is ________.
A. high; low B. low; low C. low; high D. high; high
After browsing his cabinets to see what meals he can make, Ken is deciding whether to make nachos or spaghetti for dinner. If Ken makes spaghetti, we can conclude:
A. Ken doesn't like nachos. B. Ken will get more utility from making spaghetti for dinner than nachos. C. Ken prefers nachos over spaghetti. D. None of these is true.