In the long run, if ATC equals price at the output level where MC = MR then:
A) new firms may be incentivized to enter the industry.
B) the firm will shut down.
C) the firm will earn a normal profit.
D) the firm may be able to minimize losses.
Answer: C) the firm will earn a normal profit.
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Why does a larger government budget deficit increase the magnitude of the crowding-out effect?
Suppose the federal government had budget surpluses of $80 billion in year 1 and $120 billion in year 2 but had budget deficits of $10 billion in year 3 and $40 billion in year 4. Also assume that it used its budget surpluses to pay down the public debt
At the end of these four years, the federal government's public debt would have: A. increased by $50 billion. B. increased by $150 billion. C. decreased by $200 billion. D. decreased by $150 billion.
Suppose the typical household spends $3,500 on goods and services during the month of January, and $4,300 on the same goods and services in February. Using January as the base period, what is the consumer price index for February?
a. 151.4 b. 81.4 c. 55.1 d. 122.9
If a firm is operating in a perfectly competitive market in which the market price equals $12, then its
a. marginal revenue is $12 b. marginal revenue is less than $12 c. marginal revenue is greater than $12 d. marginal cost is less than $12 e. marginal cost is greater than $12