When a purely competitive firm is in long-run equilibrium, it is said to achieve allocative efficiency because:
A. Total revenue is at a maximum
B. Marginal cost equals marginal revenue
C. Average cost equals marginal cost
D. Average cost is at a minimum
B. Marginal cost equals marginal revenue
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Excess volatility refers to
A) the unwillingness of financial analysts to consistently recommend the same stocks. B) the greater volatility of futures prices compared to the volatility of prices of the underlying assets. C) the tendency for stocks with high rates of returns also to have quite variable returns. D) the larger movements in market prices of stock than in their fundamental values.
Economists blame the long lines at gasoline stations in the U.S. in the 1970s on
a. U.S. government regulations pertaining to the price of gasoline. b. the Organization of Petroleum Exporting Countries (OPEC). c. major oil companies operating in the U.S. d. consumers who bought gasoline frequently, even when their cars' gasoline tanks were nearly full.
Other things the same, if the U.S. price level falls, then
a. U.S. residents want to buy more foreign bonds. The real exchange rate rises. b. U.S. residents want to buy more foreign bonds. The real exchange rate falls. c. U.S. residents want to buy fewer foreign bonds. The real exchange rate rises. d. U.S. residents want to buy fewer foreign bonds. The real exchange rate falls.
Money prices are an extremely effective device for promoting social cooperation because
A) most people want money more than they want anything else. B) people are basically selfish. C) scarcity can be eliminated through appropriate changes in money prices. D) they don't change rapidly when circumstances change. E) they help to clarify the options available to people.