Answer the following statements true (T) or false (F)
1. If a firm cannot make a profit under conditions of perfect competition, it should shut down as soon as possible.
2. Allocative efficiency occurs when firms are producing the goods consumers most want and consumers pay a price equal to marginal cost.
3. Consumer surplus is the area above the demand curve and below the equilibrium price.
4. Producer surplus is the difference between the price the firm is willing to sell its goods and the price it actually receives.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
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Sugar price supports ensure an abundance of sugar, and hence reasonable prices for consumers.
Answer the following statement true (T) or false (F)
If velocity does not change and the quantity of money grows at the same rate as does real GDP, then in the long run
A) the real interest rate is less than the nominal interest rate. B) the inflation rate equals zero. C) the nominal interest rate equals zero. D) the inflation rate equals the growth rate of the quantity of money. E) the nominal interest rate is less than the real interest rate.
Dollarization by a foreign country is another form of:
a. balancing a country's current account. b. maintaining monetary policy independence. c. fixing an exchange rate. d. maintaining a balanced government budget.
If the security guard is somehow certain that the shoplifter would not steal, his best response would be
a. Being watchful b. Sleeping on the job c. Run d. Hide