Any uses of current income for purposes other than purchasing currently produced domestic goods and services are called an injection
Indicate whether the statement is true or false
FALSE
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If a price ceiling is set above the equilibrium price, then
A) there will be a surplus of the good. B) there will be a shortage of the good. C) there will be neither a shortage nor a surplus of the good. D) the price ceiling will generate revenue for the government. E) the price ceiling affects suppliers but not demanders.
If a competitive firm cannot earn profit at any level of output during a given short-run period, then which of the following is LEAST likely to occur?
A) It will shut down in the short run and wait until the price increases sufficiently. B) It will exit the industry in the long run. C) It will operate at a loss in the short run. D) It will minimize its loss by decreasing output so that price exceeds marginal cost.
Producer surplus is the area
a. under the supply curve. b. between the supply and demand curves. c. below the price and above the supply curve. d. under the demand curve and above the price.
If Microsoft is earning a rate of return greater than the return necessary for the business to continue operations in the long run, then
A. the normal rate of return is zero. B. total costs exceed total revenue. C. total costs exceed a normal rate of return. D. the firm is earning an economic profit.