A perfectly competitive firm is selling 300 units of output at $4 each. At this output level, total fixed cost is $100 and total variable cost is $500. The firm
A) is maximizing its profit.
B) is earning a profit, but not necessarily the maximum profit.
C) is experiencing an economic loss.
D) should shut down.
Answer: B
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A standard which came to the market first, such as the QWERTY letter layout in typewriters, can become entrenched (this layout is still used for computer keyboards today). What is this phenomenon called?
A) path dependency B) sunk cost C) comparative advantage D) network externalities
An increase in the desired stock of housing would be caused by ________
A) an increase in household formation B) higher residential consumption C) a decrease in expected future income D) an increase in home prices
The closer a market's Herfindahl-Hirschman Index (HHI) is to ________ the less competitive the market, which means there are ________ firms in the market.
A) 100; many B) 10,000; many C) 10,000; few D) 100; few
The purpose of an expansionary monetary policy is to increase:
A. The GDP-gap B. The inflation rate C. Real GDP D. Interest rates