In the long run, firms in a perfectly competitive market choose to produce a quantity:
A. that earns zero economic profits.
B. that does not cover minimum average variable costs.
C. where marginal costs are less than average variable costs.
D. where ATC and AVC are at their minimum values.
A. that earns zero economic profits.
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What can one learn from the following figure?
What will be an ideal response?
Which of the following will increase interest rates in the short run?
a. an decrease in reserve requirements b. open market sales by the Fed c. a decrease in real GDP d. an decrease in the price level
Patents do not
a. provide firms an incentive to research. b. assign property rights to inventors. c. protect the rights of inventors for their lifetimes. d. internalize externalities.
Jordan is planning ahead for retirement and must decide how much to spend and how much to save while he's working in order to have money to spend when he retires. When the income effect dominates the substitution effect, an increase in the interest rate on savings will cause him to
a. decrease his savings rate. b. increase his savings rate. c. continue saving at the current rate. d. Any of the above could be correct.