The "Bubbles, Bubbles" soap bubble firm's price and cost data are: price = $10; MR = $10; MC = $10; ATC = $10 . This firm is
a. making an economic profit of $10
b. in monopolistic competition and in short-run equilibrium
c. about to shut down because economic profit is zero
d. a monopolist with a relatively inelastic demand
e. in a perfectly competitive market and in long-run equilibrium
E
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Answer the following statement(s) true (T) or false (F)
1. If the consumer chooses not to purchase potatoes, then the marginal value of potatoes must be less than or equal to the relative price of potatoes. 2. The steeper the indifference curve, the greater the marginal value of a good. 3. If a person is willing to trade one good for another, their new basket after the trade must lie on a lower indifference curve than their original basket. 4. Along a convex indifference curve, the marginal value of a good rises as the quantity of the good rises. 5. When using the composite good convention all other goods are measured in terms of dollars.
Assuming that one dollar trades for 6 yuan, what is the dollar cost of 30 yuan?
A) $6 B) $30 C) $10 D) $5
Changes in which of the following will cause changes in the equilibrium federal funds rate?
A) the demand for excess reserves by banks B) the supply of reserves created through past open market operations C) the demand for required reserves by banks D) all of the above
A movement along the consumption function shows the change in consumption expenditure as a result of a change in
A) disposable income. B) the interest rate. C) net taxes. D) the price level. E) saving.