Which term represents a situation in which all firms earn zero economic profits producing the output level where P = MR = MC and P = AC?
a. Perfect competition
b. Marginal revenue
c. Long-run equilibrium
d. Shut-down point
c. Long-run equilibrium
Long-run equilibrium occurs when all firms earn zero economic profits producing the output level where P = MR = MC and P = AC.
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A small Caribbean island-country produces only pineapples and rum. If resources are used efficiently in the economy,
A. it will not be possible to produce more rum without decreasing the production of pineapples. B. it will be possible to produce more pineapples without decreasing the production of rum. C. it will be producing on its production possibilities curve. D. it will not be possible to produce more rum without decreasing the production of pineapples AND it will be producing on its production possibilities curve.
Capital flight
A) increases reserves. B) is never associated with the expectation of devaluation. C) may undo expected devaluation. D) reduces losses during a devaluation scare. E) decreases reserves and may induce devaluation.
Unlimited liability exists when
A) the profits of the firm are taxed once. B) a firm dissolves when the owner dies. C) a corporation exists. D) the personal assets of the owner of a firm can be seized to pay off the firm's debts.
In 2009, our goods and services trade deficit was almost $______ billion.
A. 300 B. 400 C. 500 D. 600