In the long run, the price for a perfectly competitive firm
A) will be determined by the firm's supply and demand curves.
B) will allow for positive economic profits.
C) will equal marginal cost where marginal cost is at a minimum.
D) will equal the minimum average total cost.
D
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The figure above shows Ilene's budget line. The price of a can of cat food is $2. The price of a can of dog food
A) is $1.60. B) is $4.00. C) is $5.00. D) cannot be determined without more information.
When the exchange rate, E, and the foreign price level, P*, is fixed, domestic inflation depends primarily on
A) amount of aggregate demand. B) home price level set by IMF. C) current account balance. D) government tax policy. E) foreign interest rates.
Accounting profits are total revenues minus
A) all relevant opportunity costs. B) explicit and implicit costs. C) explicit costs and all other relevant opportunity costs. D) explicit costs.
When government mandates participation in a program to solve an information asymmetry problem, it is trying to prevent:
A. moral hazard. B. adverse selection. C. building a reputation. D. illegal screening.