The graph above shows cost curves for a perfectly competitive firm. If market price is $5, how much output will the firm produce?
A. 600 units
B. 500 units
C. 0 units
D. 200 units
Answer: A
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When a permanent negative supply shock hits the economy ________
A) in the long-run, output is permanently lowered whether the central bank reacts or not B) inflation decreases in the short-run C) there is no long-run effect on inflation whether the central bank reacts or not D) all of the above E) none of the above
An example of an underemployed resource is a(n)
a. farmer in Illinois who plants corn instead of wheat b. auto mechanic who is laid off from his job c. welfare recipient who doesn't work d. retired senior citizen who doesn't work e. person with a Ph.D. in chemistry who drives a taxi as a full-time job
Compared to the rest of the industrial world, the United States' tax revenues
a. as a percent of GDP is the lowest b. as a percent of GDP ranks among the highest c. as a percent of GDP ranks among the lowest d. as a percent of GDP is the highest e. is the lowest
Which of the following are explanations for sticky prices?
a. long-term labor contracts b. fixed exchange rates c. flexible exchange rates d. fixed money supply