Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Currently in sector Y, price is
A. equal to average cost.
B. less than average cost.
C. greater than average cost.
D. More information is needed to answer the question.
Answer: A
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The law of decreasing returns states that as a firm uses more of a
A) fixed input, with a given quantity of variable inputs, the marginal product of the fixed input eventually decreases. B) variable input, total output will increase indefinitely. C) variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases. D) variable input, output will begin to fall immediately. E) fixed input and a variable input, the marginal product of the fixed input and the marginal product of the variable input both decrease.
Scatterbrain Samantha often forgets to lock her house. This has caused the probability of a burglary to be 30%. If her house gets broken into, she faces a property loss of $10,000, otherwise she gets to keep her $100,000 . What is her expected loss?
a. $3000 b. $10,000 c. $30,000 d. $100,000
It is important to distinguish between the privately held portion of the national debt and the portion held by government agencies and the Federal Reserve System because:
a. the government will not have to repay the privately held debt. b. only the privately held debt creates a net interest liability for the federal government. c. the privately held debt does not create a net interest liability for the federal government. d. taxes will have to be raised in order to pay the interest on the debt held by the Federal Reserve system.
Suppose this year's inflation rate is 4 percent, which is greater than the 2 percent everyone expected. Which of the following is true?
a. real GDP will increase b. the unemployment rate will probably rise c. potential output will remain the same d. the short-run aggregate supply curve will shift to the right e. there will be a leftward movement along a given short-run aggregate supply curve