Use the following graph showing short-run cost curves for a perfectly competitive firm to answer the next question.
At what price would the firm earn a normal profit and break even?
A. P1
B. P2
C. P3
D. P4
Answer: D
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Total planned consumption
a. exceeds total income at very low levels of output. b. is always less than total income. c. exceeds total income at very high levels of output. d. always equals total income.
Barriers to entry:
A. restrict the number of firms in an industry. B. exist only in perfectly competitive markets. C. limit output in an industry. D. do not affect the number of firms in an industry.
Which statement is true?
A. Autonomous C can never be greater than induced C. B. Induced consumption can never be zero. C. As disposable income gets larger, induced C gets larger relative to autonomous C. D. None of these statements are true.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point B. The opportunity cost of moving from Point B to Point A is the
A. 120 LCD TVs that must be forgone to produce 20 additional OLED TVs. B. 30 LCD TVs that must be forgone to produce 40 additional OLED TVs. C. 20 OLED TVs that must be forgone to produce 30 additional LCD TVs. D. 40 OLED TVs that must be forgone to produce 120 additional LCD TVs.