In long-run equilibrium, the perfectly competitive firm produces
a. where P = MC = AC.
b. at the lowest point on its long-run average cost curve.
c. where its long-run average cost curve is tangent to its horizontal demand curve.
d. All of the above are correct.
d
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The above figure shows the demand curves in four different markets. If each of the markets has an identical upward sloping supply curve and the same tax is levied on suppliers, which market would produce the smallest amount of deadweight loss?
A) A B) B C) C D) D E) C and D
In the above figure, which of the following is TRUE regarding the movements from point A to B and from point C to D?
I) The movement from point A to B shows that the economy has chosen to produce 100 more jets. II) The movement from point C to D shows that the economy has chosen to produce 100 more jets. III) The movement from point A to B and from point C to D have the same opportunity cost. A) I and II B) I and III C) II and III D) I, II and III
The price of a good will tend to fall when
a. there is excess demand for the good. b. there is excess supply of the good. c. demand for the good increases. d. the supply of the good decreases.
When exchange rates are__ , agreeing to wait for one week from today to engage in an international transaction carries __
a. flexible rather than fixed; less risk b. flexible rather than fixed; the same amount of risk c. flexible rather than fixed; more risk d. fixed rather than flexible; the same amount of risk