If price were regulated to be equal to long-run marginal cost, the firm in Figure 8.14 would be:
A. making a zero economic profit.
B. losing money.
C. making a positive economic profit.
D. breaking even.
Answer: B
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The stronger that consumer demand is for a good or service, other things being equal,
a. the higher its price. b. the lower its price. c. the more stable its price. d. the less stable its price.
Premium beer is likely considered
A) a normal good. B) an inferior good. C) to have inelastic demand. D) to have perfectly elastic demand.
Wealth creating transactions are more likely to occur
a. With private property rights b. With contract enforcement c. Both a and b d. None of the above
Which of the following is considered to be the major cause of the recession of 2001?
a. A decrease in defense spending b. A spike in oil prices and the collapse of the housing bubble c. A decline in oil prices and the collapse of the housing bubble d. Federal Reserve policy e. None of the above.