Refer to the below graph of a representative firm in monopolistic competition. If curve (2) represents ATC and line (3) represents demand, then we can conclude that the industry:
A. Has positive economic profits
B. Is in long-run equilibrium
C. Will contract in the long run
D. Is not maximizing profits
B. Is in long-run equilibrium
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"Because the price of a diamond is much greater than the price of a gallon of water, the consumer surplus from diamonds is greater than the consumer surplus from water." Is the previous analysis CORRECT? Explain your answer
What will be an ideal response?
If the economy is growing 3% a year and the government increases the ratio of interest on the national debt to GDP, we may conclude that
A) the output ratio will fall. B) additional interest payments exceed 3% of GDP. C) tax revenues will fall. D) the Laffer curve will be inoperable.
The money price of a good is also known as its
A) relative price. B) case price. C) absolute price. D) subjective price.
An increase in the real rate of interest that can be earned on U.S. investments above the rate that can be earned on investments in India would:
a. increase the price of the dollar in Indian rupees. b. increase the supply of dollars by those holding U.S. dollars. c. decrease the equilibrium exchange rate of Indian rupees per dollar. d. all of these.