Give a complete but concise definition of the following terms.
a. perfect competition
b. perfectly competitive firm's demand curve
c. shutdown point
d. long-run equilibrium in perfect competition
What will be an ideal response?
a. Perfect competition is a market structure in which there are many small firms each selling a homogeneous product, with freedom of entry and exit and complete information.b. The perfectly competitive firm’s demand curve is horizontal, which means it can sell as much as it wishes at the prevailing market price.c. The shutdown point for the firm in the short run is the output point where average revenue is less than average variable cost.d. Long-run equilibrium for the perfectly competitive firm is an output level such that P = MC = AC and economic profit is zero.
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Which of the following does not occur in resolving a debt crisis?
A) Debts are restructured B) Repayment periods are shortened C) Interest rates are reduced D) Some partial debt forgiveness
Which of the following is TRUE about a college education as a signaling device?
A) It is a useful signal only if individuals choose majors related to their ultimate field of employment. B) It is a useful signal only if a college education is open to all individuals, no matter what their previous level of educational accomplishment was. C) It is a useful signal whether or not people actually learn anything in college. D) It is a useful signal only if the job in question cannot be done without the preparatory coursework the college degree required. E) It is less and less a useful signal in the post-industrial economy, where the skill sets employers need change so rapidly.
Refer to the accompanying figure.
Starting from long-run equilibrium at point C, a favorable inflation shock that decreases inflation from ? to ?1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. B; C B. A; B C. B; A D. A; C
Private saving is defined as
A) Y + TR - C - T. B) T + G + TR. C) T - G + TR. D) Y + TR + C - T.