Firms in long-run equilibrium in a perfectly competitive industry will produce at the low points of their average total cost curves because:
a. free entry implies that long-run profits will be zero no matter how much each firm produces.
b. firms seek maximum profits and to do so they must choose to produce where average costs are minimized.
c. firms maximize profits and free entry implies that maximum profits will be zero.
d. firms in the industry desire to operate efficiently.
c
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The most important developments that reduced banks cost advantages include
A) the growth of the junk bond market. B) the competition from money market mutual funds. C) the growth of securitization. D) the growth in the commercial paper market.
Assume that the utility function of an individual is represented as U = ?W - 0.001W; where W (his present wealth) = $250,000 . He considers investing in a gamble which would double his wealth if he wins but still leave him with $250,000 if he loses. Given that his probability of winning is 0.6, calculate his expected utility of taking the bet
a. 157 units b. 250 units c. 207.11 units d. 224.3 units
The concept or term that refers to the notion that all variables except those under immediate consideration are held constant for a particular analysis is known as ____________. (check all that apply)
a. the generalizations assumption b. the other-things-equal assumption c. laissez faire d. ceteris paribus e. the scientific method
A person who is not in the labor force and not actively looking for a job is
A. employed. B. unemployed. C. underemployed. D. discouraged.