If you take out a bank loan prior to unanticipated inflation
A) your bank will gain at your expense.
B) you will gain at the expense of your bank.
C) it will be harder for you to repay the loan because of the inflated dollar.
D) neither you nor your bank will be affected, because the loan was made prior to the inflation.
B
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The most important function of middlemen is to
A) act as marketing agents for producers. B) expand the number of jobs in the economy. C) produce valuable information and lower transaction costs. D) protect consumers from exploitation. E) stand between buyers and sellers to control markups.
If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then the firm will
A) incur an economic loss. B) make zero economic profit, that is, its owners make a normal profit. C) make an economic profit of $4 million. D) make an economic profit of $16 million.
In the short run, when the prevailing market price falls below the average variable cost curve, a firm in perfect competition will shut down because: a. economic profit is zero
b. price is less than marginal revenue. c. marginal revenue is insufficient to pay average variable cost. d. other firms will enter the market seeking profits.
Refer to the graph above. Which of the following factors will shift AS 1 to AS 2?
An increase in input prices A decrease in business taxes An increase in real interest rates A decrease in business subsidies