In both perfect competition and monopoly, a firm:
a. maximizes profit by equating marginal revenue to marginal cost
b. will shut down in the short run if price is less than average variable cost.
c. will always earn a zero economic profit.
d. will be characterized by both (a) and (b).
d
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________ coordinate economic activity in which there are substantial ________
A) Markets; team production efficiencies B) Markets; transactions costs C) Firms; economies of scale D) Firms; principal-agent problems
If the inflation rate target is 2%, the current inflation rate is 3%, and the output gap is 2%, then according to the Taylor rule, the nominal federal funds rate should be ________ percent
A) 4.5 B) 7 C) 6.5 D) 5.5 E) none of the above
In markets, information about the relative value of resources is communicated through: a. government agencies. b. planning committees. c. prices
d. unions.
In summary, many of the government's farm programs are an attempt to shift the
a. demand curve for farm goods to the right b. demand curve for farm goods to the left c. supply curve for farm goods to the left d. supply curve for farm goods to the right e. supply and demand curves for farm goods to the right