In long-run equilibrium, a competitive firm produces where P = MR = MC = minimum ATC and earns normal economic profits.
Answer the following statement true (T) or false (F)
True
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In the United States, the productive factor that, as a group, receives the largest fraction of the nation's total income is
A) labor. B) consumption goods and services. C) land. D) entrepreneurshi
As the price of milk increases, what would reasonably be expected to happen to the equilibrium price and equilibrium quantity of cereal? (Milk and cereal are complements.)
A) Equilibrium price would increase and equilibrium quantity would decrease. B) Equilibrium price and quantity would both decrease. C) Equilibrium price would decrease and equilibrium quantity would increase. D) Equilibrium price and quantity would both increase.
When an economy is in equilibrium,
A) planned expenditures exceed production and income. B) there is no savings nor investment. C) government tax revenues equal planned government expenditures. D) production and income equal planned expenditures.
The reservation price of good X is
A. the price at which one would be indifferent between good X and simply keeping the money. B. the cost of producing good X. C. the market price for a good. D. any price above what you would be willing to pay for the good.