In Figure 5.8, if the supply curve moves from S3 to S4,
A. the firm will go from making an economic profit to a normal profit.
B. the firm will go from making a normal profit to a loss that is big enough to make it want to shutdown.
C. the firm will make a smaller economic profit than they used to.
D. the firm will go from making a normal profit to a loss but one that is not big enough to make it want to shutdown.
Answer: D
You might also like to view...
Depository institutions do all the following EXCEPT
A) minimize the cost of obtaining funds. B) create liquidity. C) pool risks. D) create required reserve ratios.
The price of gasoline rises by 33 percent to $3.50 a gallon and stays at that price for the next two years. The quantity of gasoline demanded two years from now will be
A) the same as one month after the price hike. B) greater than one month after the price hike. C) less than one month after the price hike. D) the same as it would be if the price hike had never occurred.
Which of the following is not counted in M1?
A) currency in circulation B) traveler's check balances C) coins in circulation D) credit card balances E) checking account balances
Monetary policy could be procyclical if the Federal Reserve
A) is late recognizing that a recession has begun and does not conduct expansionary monetary policy. B) is late recognizing that a recession has begun and conducts expansionary monetary policy. C) is quick to recognize that a recession has begun and conducts expansionary monetary policy. D) is quick to recognize that a recession has begun and does not conduct expansionary monetary policy.