At an output of 12, ATC is $12 and price is $9. At an output of 13, ATC is $12.40 and price is $9. MC = MR at an output of 12.6. At that output the firm will
A. take a loss.
B. break-even.
C. make a profit.
A. take a loss.
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Your grandfather tells you that he earned $7,000/year in his first job in 1961. You earn $35,000/year in your first job in 2016. You know that average prices have risen steadily since 1961. You earn
A) more than 5 times as much as your grandfather in terms of real income. B) less than 5 times as much as your grandfather in terms of real income. C) less than 5 times as much as your grandfather in terms of nominal income. D) 5 times as much as your grandfather in terms of real income.
If the government requires a natural monopoly to price at marginal cost:
a. monopoly firms will earn zero economic profits because the price of the good equals the cost of producing that good. b. monopoly firms will operate at a loss because P < AC. c. more firms will be able to enter the market. d. producer surplus will increase because quantity supplied is greater.
One difference from private insurance programs is that social insurance programs:
A. are universally offered to everyone. B. use a sliding scale of payment based on ability to pay. C. serve everyone who meets baseline eligibility requirements. D. None of these is true.
Which of the following statements describes what most likely occurred in this economy?
a. Unemployment fell below the natural rate of unemployment.
b. There was a temporary negative shock to demand-side forces.
c. A rightward shift in SRAS caused an inflationary gap.
d. An increase in input prices caused a recessionary gap.