The maximum amount a rent seeker would pay for a monopoly is the ________
A) market price
B) deadweight loss
C) monopoly's economic profit
D) monopoly's normal profit
C
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Assume a firm has the following cost and revenue characteristics at its current level of output: price=$10.00 . average variable cost=$8.00 and average fixed cost =$4.00 . This firm is
a. incurring a loss of $2.00 per unit and should shut down. b. realizing only a normal profit. c. realizing an economic profit of $2.00 per unit. d. incurring a loss per unit of $2.00 . but should continue to operate in the short run.
The exchange rate of the dollar relative to other currencies is determined by market forces. When equilibrium is present in the exchange rate market,
A) the purchases of Americans from foreigners will be equal to the sales of Americans to foreigners. B) imports from foreigners will create jobs in other countries but employment in the United States will decline by an equal amount. C) the gains of Americans from international trade will be just equal to the gains of foreigners from the trade. D) Americans will gain from the international trade only if foreigners lose an equal amount.
Entrepreneurs are unnecessary in a market economy, and their profit is unearned.
Answer the following statement true (T) or false (F)
Under a liquidity trap in the New Keynesian model,
A) prices cannot be sticky. B) monetary policy is ineffective. C) the economy is always efficient. D) fiscal policy is ineffective.