Refer to the diagram. At P 2 , this firm will:
A. produce 44 units and realize an economic profit.
B. produce 44 units and earn only a normal profit.
C. produce 68 units and earn only a normal profit.
D. shut down in the short run.
B. produce 44 units and earn only a normal profit.
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If a technological advance makes it possible to produce computers at a lower cost
A) the demand for computers decreases. B) the demand for computers increases. C) the supply of computers increases. D) the supply of computers decreases.
Moving along the short-run Phillips curve, a ________ unemployment rate can only be achieved by paying the cost of ________
A) lower; a lower inflation rate B) lower; a lower price level C) lower; a higher expected inflation rate D) lower; a higher inflation rate E) higher; a higher inflation rate
Prices communicate information about the relative value of resources in the marketplace. Which of the following would cause the marginal value and, hence, the price, of oranges to rise?
a. A freeze wipes out half of the Florida citrus groves. b. Orange juice is shown to reduce blood cholesterol levels. c. The price of grape, cranberry, and pineapple juice falls dramatically.
The discount rate is
a. set in the money market. b. set by each member bank. c. set by the Federal Reserve Bank. d. the same as the federal funds rate.