In a perfectly competitive market, if P > ATC in the short run, there is apt to be
A. an inward shift in the industry supply curve.
B. an accounting loss for existing firms.
C. entry of new firms into the market.
D. an upward pressure on price.
Answer: C
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Refer to Figure 4-3. If the market price is $3.50, what is the maximum number of ice cream cones that Kendra will buy?
A) 1 B) 2 C) 3 D) 4
When a lack of information exists for parties to a deal:
A. it is always worth getting more information before making a decision. B. the cost of acquiring information sometimes is prohibitive and not worth it. C. an exchange will never happen. D. the exchange will always happen anyway, with little chance of maximizing surplus.
An increase in injections into the economy may lead to:
a) An outward shift of aggregate demand and demand-pull inflation b) An outward shift of aggregate demand and cost-push inflation c) An outward shift of aggregate supply and demand-pull inflation d) An outward shift of aggregate supply and cost-push inflation
Arbitrage is the purchase of foreign currency on one market for immediate resale on a foreign market in order to profit from a price discrepancy.
a. true b. false