In a competitive market the current price is $5 . The typical firm in the market has ATC = $5.50 and AVC = $5.15
a. In the short run firms will shut down, and in the long run firms will leave the market.
b. In the short run firms will continue to operate, but in the long run firms will leave the market.
c. New firms will likely enter this market to capture any remaining economic profits.
d. The firm will earn zero profits in both the short run and long run.
a
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If a firm increases its output and finds that its average total cost decreases as a result, this implies that
a. marginal cost exceeds average total cost. b. the cost of producing an additional unit of output is more than the average total cost. c. average fixed cost is increasing. d. average total cost exceeds marginal cost.
A reduction in the required reserve ratio has the instant effect of:
a. Increasing the monetary base. b. Increasing excess reserves. c. Increasing bank shareholders' equity. d. Increasing bank reserves. e. All of the above are correct.
An increase in equilibrium price and a decrease in equilibrium quantity is most likely the result of:
A. an increase in demand. B. an increase in supply. C. a decrease in demand. D. a decrease in supply.
Which agency lends money to countries to promote their economic development?
A. the World Bank B. the League of Nations C. the International Monetary Fund D. the Federal Reserve