Exhibit 7-12 Marginal revenue and cost per unit curves
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As shown in Exhibit 7-12, the firm will shut down in the short-run at a price below:
A. OA.
B. OB.
C. OC.
D. OD.
Answer: A
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Which of the following holds true at the chosen level of output in the long run for firms in a perfectly competitive market?
A. P = MC B. P = minimum AVC C. MR = AVC D. MR > ATC
The principle tool the Fed uses to keep the federal funds rate close to the target is:
A. open market operations. B. the required reserve rate. C. the IOER rate. D. discount lending.
A natural monopoly arises when:
A. economies of scale are so great that only one firm can exist in a market. B. a firm acquires a patent. C. two firms merge to become the only firm serving an entire market. D. a single firm controls all of a natural resource.
The main reason our current account deficit is so large is that
A. we are running huge merchandise trade deficits. B. we are running huge federal budget deficits. C. we are allowing too much foreign investment in the United States. D. we are investing too much abroad.