If the CPI declines from one year to the next, then which one of the following statements is not true?
A. The CPI turns negative in the next year.
B. There is deflation.
C. The inflation rate is negative.
D. The average price level is decreasing.
Answer: A
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Economic profit is ________
A) included in the firm's total opportunity cost B) equal to normal profit minus total opportunity cost C) equal to total revenue minus marginal cost D) equal to total revenue minus total opportunity cost
Vertical integration often aims to
a. Prevent the retailers from defeating upstream price discrimination through arbitrage b. Reward the retailer for undertaking the risk inherent in introducing a new product c. Avoid paying higher taxes d. All of the above
All of the following conditions, except one, will necessarily be satisfied when a perfectly competitive firm is in short-run equilibrium. Which condition is the exception?
a. marginal revenue equals average total cost b. marginal cost crosses marginal revenue from below c. marginal revenue equals price d. price equals marginal revenue e. profit is maximized or loss is minimized
One problem for economic stability is that in a period of inflation,
A. banks will be tempted to increase lending in order to increase profits. B. banks will be tempted to decrease lending in order to increase profits. C. profit-oriented banks will tend to hold excess reserves and decrease the money supply. D. deposits will decrease and banks will have to reduce lending.