Use the following graph for a monopolistically competitive firm to answer the next question. 
The long-run equilibrium price and output for this firm will be
A. A and C.
B. A and D.
C. B and D.
D. B and C.
Answer: B
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The Federal Reserve's long standing tools include
A. changing the reserve ratio. B. open market operations. C. changing the level of the targeted interest rate. D. all of these options are correct.
Ben says that "an increase in the tax on beer will raise its price." Holly argues that "taxes should be increased on beer because college students drink too much." We can conclude that:
A. Ben's statement is normative, but Holly's is positive. B. Holly's statement is normative, but Ben's is positive. C. Both statements are normative. D. Both statements are positive.
In the expectations-augmented Phillips curve, ? = ?e - 3(u - 0.05). When ? = 0.03 and ?e = 0.06, the unemployment rate is
A. 0.04. B. 0.05. C. 0.06. D. 0.07.
The main disadvantage to organizing a business as a proprietorship is
A) its complex management structure. B) limited liability. C) unlimited liability. D) that economic profit cannot be maximized.