A competitive market maximizes social welfare because in a competitive market,
A) profits are zero.
B) price equals marginal cost of the last unit produced.
C) price equals average cost of the last unit produced.
D) there is free entry and exit.
B
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Flora's Flowers operates in a perfectly competitive market. At the point where marginal cost equals marginal revenue, ATC = $10, AVC = $5, and the price per unit is $15 . In this situation,
a. Flora earns positive profits in the short run b. Flora will shut down in the short run c. Flora's supply curve will shift to the left d. Flora's supply curve will shift to the right e. the market price will rise in the long run
After graduating with a degree in kinesiology, Jem worked at the only physical therapy clinic in her small town even though the wage was low. In school, she had hoped to work for a professional sports team or an Olympic training center, but to do so she would have to move, and she had family reasons for staying. Jem’s story illustrates what type of labor market?
a. monopoly b. competitive c. monopsony d. equilibrium
What happens to the real interest rate?
a. It equalizes at 4 percent due to capital movements between the two countries.
b. It equalizes at 5 percent due to capital movements between the two countries.
c. The two interest rates converge at 5 percent.
d. The two interest rates converge at 3 percent.
Jeff Kaufman decides to bank with Paris First National Bank (PFN). He opens a checking account by depositing $1,000. According to the PFN balance sheet, after this initial $1,000 checkable deposit, there are $1,000 in:
A. reserves and $1,000 in checkable deposits. B. liabilities and $2,000 in checkable deposits. C. checkable deposits and $0 in assets. D. assets and $0 in liabilities.