If a perfectly competitive industry is in long-run equilibrium, then
A) price equals average cost.
B) price is greater than average cost and equal to marginal cost.
C) all firms earn the same accounting profits.
D) marginal cost is less than average cost.
Answer: A
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According to Hughes and Cain (2011), after the Civil War (1861–1865) the freed slaves were
(a) left to fend for themselves without property, money or skills. (b) provided with 40 acres and a mule to get a start in life as free people. (c) provided with some monetary compensation for the centuries-long oppression and exploitation they and their ancestors had faced. (d) able to quickly become successful farmers and craftsmen.
In the 19th century, Russian peasants noticed that during cholera epidemics there were lots of doctors around; in an attempt to eliminate cholera, they killed all the doctors. This is an example of
a. mistaking correlation with causation. b. the fallacy of opportunism. c. excessive abstraction. d. rationality. e. marginal analysis.
The money supply will increase by a multiple of the increase in bank reserves created by the central bank unless:
A. there is 100 percent reserve banking. B. banks' desired reserve/deposit ratio is 0.20. C. there is fractional reserve banking. D. the public holds no currency.
Economic rent serves
A) a descriptive function by making some wealthier than others, but serves no allocative function. B) an allocative function by guiding available supplies to the most efficient use. C) only to make the rich richer and the poor poorer. D) no useful function in a modern economy.