For a perfectly competitive firm in the short run, if the following conditions are true, P = MR = MC > AC, then
A. the firm is maximizing profits and is making an economic profit.
B. the firm is not maximizing profits but is making an economic profit.
C. the firm is not maximizing profits and is not making an economic profit.
D. the firm is maximizing profits and is suffering an economic loss.
Answer: A
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Members of the Board of Governors are
A) elected by the district bank presidents. B) appointed by the President of the United States, subject to confirmation by the Senate. C) appointed by the National Monetary Commission. D) appointed by the Securities and Exchange Commission, subject to congressional veto.
If the graph shown is displaying a competitive labor market, the equilibrium wage in the market would be:
A. Q*.
B. P*.
C. S.
D. D.
According to the Taylor rule, the Fed should:
a. lower the fed funds rate by 0.5% if RGDP increases 1.0% over potential GDP. b. raise the fed funds rate by 0.5% if RGDP increases 1.0% over potential GDP. c. raise the fed funds rate by 1.0% if RGDP increases 0.5% over potential GDP. d. raise the fed funds rate by 2.0% if RGDP increases 0.5% over potential GDP.
Statistical data provided by the U.S. Department of Transportation shows that the median income of individuals traveling on the nation's bus systems is $18,000 compared to $65,000 for those who normally travel by air. This finding is best explained by which of the following statements?
a. Persons with high income are more likely to fly because the opportunity cost of their time is generally higher than those with lesser income. b. Traditionally, lower income groups prefer slower methods of transportation. c. Wealthy individuals own stock in the airlines and, therefore, receive preferential treatment. d. Low-income groups are generally located near bus stations; wealthy groups congregate around airports.