Figure 9-3
?
In Figure 9-3, equilibrium GDP is
A. $2,000 billion.
B. $3,000 billion.
C. $4,000 billion.
D. $5,000 billion.
Answer: C
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“Assuming the long-run average cost curve is U shaped, a firm will always seek to operate at the lowest point on the long-run average cost curve.” True or false?
What will be an ideal response?
In order to maximize social welfare, a firm's production of a good should occur at the output where
A. Social marginal cost equals social marginal benefit. B. Price equals social marginal revenue. C. All pollution is entirely eliminated. D. Marginal revenue equals price.
Just-in-time production and inventory control can result in:
A. excess inventories that mess up production schedules. B. a fall in inventories and an increase in efficiency. C. a lack of coordination between suppliers and retailers. D. decreased risk bearing on the part of retailers.
Related to the Economics in Practice on page 673: Satirist Frederic Bastiat's essay arguing for a quota on sunlight in order to protect domestic candle makers suggests that it is pointless to
A. create barriers to trade in some markets but not others. B. legislate based on economic theory. C. protect industries that cannot compete effectively. D. participate in international trade.