When price is sufficient to cover average variable costs, firms suffering short-run losses will continue to operate rather than shut down.
Answer the following statement true (T) or false (F)
True
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When government spending is less than the tax revenues during a specific time period, this is known as a
A) government budget deficit. B) government budget surplus. C) balanced budget. D) public debt.
If firms in a competitive price-searcher market are earning economic profits, which of the following scenarios would best describe the change existing firms would face as the market adjusts to long-run equilibrium?
a. An increase in demand for each firm and lower prices. b. A decrease in demand for each firm and lower prices. c. An increase in demand for each firm and higher prices. d. A decrease in demand for each firm and higher prices.
Special interest group K receives a 1/100th slice of the economic pie. Its net benefit from either an economic growth policy or a transfer policy is $200,000. In order for group K to be indifferent between the two policies, the economic growth policy would have to make the size of the economic pie (Real GDP) grow by _________________. This type of analysis is used to show that special interest
groups tend to press government for ______________ instead of ________________. A) $20,000,000; economic growth; transfers B) $2,000,000; transfers; economic growth C) $20,000,000; transfers; economic growth D) $20,000,000; transfers; economic growth E) none of the above
Use the graph below to answer the next question.
Other things equal, a decrease in the price of a substitute resource would cause a
A. move from a to b on D1. B. move from b to a on D1. C. shift from D3 to D2 assuming the output effect exceeds the substitution effect. D. shift from D2 to D3 assuming the output effect exceeds the substitution effect.