Exhibit 4-2 Supply and demand curves
In Exhibit 4-2 an increase in supply would cause a movement from which equilibrium point to another, other things being equal?
A. E1 to E2.
B. E1 to E3.
C. E4 to E1.
D. E3 to E4.
Answer: A
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The difference between a firm's total revenue and its total opportunity cost is the firm's
A) normal profit. B) economic profit. C) marginal profit. D) marginal revenue.
Which of the following sectors in the economy accounted for about 70% of the spending in the U.S. during 2009?
a. The government b. Firms c. The foreign sector d. Investors e. Households
Firms in perfectly competitive markets typically have:
A. one profit-maximizing level of output. B. two profit-maximizing levels of output to choose from. C. several profit-maximizing levels of output to choose from. D. no chance of maximizing profits, since they have no control over market price.
The ratchet effect means that:
A. when aggregate demand increases, the price level remains constant. B. when aggregate supply decreases, the price level increases. C. when aggregate supply increases, the price level decreases. D. when aggregate demand decreases, the price level remains constant.