Which of the following conditions is TRUE for a profit-maximizing firm in a perfectly competitive industry?
A) MR = TC
B) ATC = AFC
C) MR = MC
D) MC = AVC
C
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Industries often lobby against the removal of regulations because
a. the regulations often enforce a de facto cartel agreement. b. their customers would be made worse off without government-proscribed standards. c. the largest firms could then dominate the industry. d. deregulation would cause higher entry prices for new firms.
A general formula for the multiplier is
A) 1/(1-MPS) B) 1/(MPC) C) 1/(MPS) D) 1/(MPC-1)
The 2008-2009 recession must have been a result of ________ because otherwise the combination of the ________ cannot be explained
A) a decrease in AD and an increase in AS; rise in the price level and the decrease in real GDP B) a decrease in AD and AS; rise in the price level and the decrease in real GDP C) a decrease in AD and AS; decrease in the price level and the decrease in real GDP D) a decrease in AD and an increase in AS; fall in the price level and the decrease in real GDP E) an increase in AD and AS; rise in the price level and the decrease in real GDP
As output increases, economies of scale occur when the
A) long-run average cost increases. B) long-run average cost decreases. C) short-run average total cost decreases. D) long-run average cost stays constant. E) long-run fixed cost decreases.