A monopolistically competitive firm
a. earns no long-run economic profit and is therefore allocatively efficient
b. earns no long-run economic profit and therefore produces at the minimum point of its ATC curve
c. earns no long-run economic profit and is allocatively efficient even though it is not producing at the minimum point of its ATC curve
d. earns no long-run economic profit, is allocatively inefficient, and does not produce at the minimum point of its ATC curve
e. has a chance of making a long-run economic profit and is therefore allocatively inefficient
D
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The "law of demand" refers to the fact that, all other things remaining the same, when the price of a good rises
A) the demand curve shifts rightward. B) the demand curve shifts leftward. C) there is a movement down along the demand curve to a larger quantity demanded. D) there is a movement up along the demand curve to a smaller quantity demanded.
Richard receives government transfer payments and currently consumes five guns and six goose livers. Assume the price of guns decreases by 10% and the price of goose liver increases by 20%
The government raises Richard's transfer payments so he can still afford five guns and six goose livers. Does this constitute a true cost-of-living adjustment? A) No. Richard is overcompensated. B) No. Richard is undercompensated. C) Yes. The payment just achieves the right level of compensation. D) Not enough information.
Economists refer to the pattern of income that people derive from different factors of production as the:
A. factor stream of income. B. factor distribution of income. C. expected future factor value. D. factor price.
Refer to the given balance sheets. If the reserve ratio is 25 percent, commercial banks have excess reserves of:
A. $12.
B. $22.
C. $16.
D. $24.