Consider a perfectly competitive market experiencing good times. In the short run, the equilibrium price will ________ and firms will earn a(n) ________
A) increase; economic profit as the new price exceeds average total cost
B) increase; normal profit as the new price exceeds average total cost
C) decrease; economic loss as new firms enter the industry
D) decrease; economic profit as firms exit the industry
E) may increase or decrease; normal profit depending on their costs
A
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Use the following graph for a private closed economy (an economy with only a private sector and no international trade) to answer the next question. 
In this economy, investment is
A. $50 billion. B. $150 billion. C. $100 billion. D. $200 billion.
Which of the following institutions plays the role of an international lender of last resort?
A) the World Bank B) the International Monetary Fund C) the European Monetary System D) the Federal Reserve System
The Arrow-Pratt measure of risk aversion is
A) negative if a person is risk averse. B) greater than one if a person is risk averse. C) negative if a person is risk loving. D) None of the above.
If one player defects in a repeated game, and his opponent is following a tit-for-tat strategy, we can predict the opponent will:
A. defect in the next round. B. renegotiate. C. cooperate and try to get his opponent to follow. D. collude.