In a perfectly competitive industry, when a firm is producing so that its total revenue equals its total cost, the firm is
A) making an economic profit.
B) incurring an economic loss.
C) making zero economic profit.
D) definitely not maximizing its profit.
E) None of the above answers is correct because the relationship between total revenue and total cost has nothing to do with the firm's profit or loss.
C
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The horizontal short-run aggregate supply curve
A) assumes that wages and all other input prices are constant. B) assumes that opportunity cost is constant. C) shows that real GDP can be increased only when prices increase. D) assumes that there is full employment in the economy.
The furniture industry consists of many manufacturers producing differentiated products. The market structure that best fits the furniture industry is probably
A) perfect competition. B) monopolistic competition. C) monopoly. D) oligopoly.
You took a summer job as a salesperson in a shoe store with the knowledge that you will either make $2,000 or $3,500 with probabilities 0.4 and 0.6 respectively. What is your expected income for the summer job?
A) $2,000 B) $3,000 C) $5,000 D) $2,900
The opportunity set contains:
a. a single combination of consumption that someone can afford given the prices of goods and the individual’s income. b. all possible combinations of consumption that someone can afford given the prices of goods regardless of the individual’s income. c. all possible combinations of consumption that someone can afford given the prices of goods and the individual’s income. d. a single combination of consumption that someone can afford given the prices of goods regardless of the individual’s income.