If ________, then a profit-maximizing, monopolistically competitive firm earns negative economic profits.
A. P < ATC
B. P = ATC
C. P > ATC
D. All of the above are possible.
Answer: A
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Which of the following is NOT a function of money? i. unit of account ii. store of value iii. unit of debt
A) i only B) ii only C) iii only D) both ii and iii E) both i and ii
Gasoline and bicycles are substitutes in consumption. Suppose we increase the federal gasoline tax to $1 per gallon. What are the initial changes that result from the tax as these markets adjust to a new general equilibrium?
A) Gasoline price rises, demand for bicycles shift s leftward. B) Gasoline price rises, demand for bicycles shifts rightward. C) Gasoline price rises, move downward along bicycle demand curve. D) Gasoline price rises, move upward along bicycle demand curve.
The optimal level of water and air quality
a. is zero, which is a pollution-free environment b. occurs when the marginal private cost of air quality equals its marginal social cost c. is greater if the marginal social cost curve of air quality shifts downward d. occurs when all negative externalities are eliminated e. eliminates the common pool problem
A currency support policy consists of the:
A. selling of a currency to maintain its value above its short-term equilibrium value. B. buying of a currency to maintain its value above its long-term equilibrium value. C. selling of a currency to offset fluctuation in supply and demand for the currency. D. buying of a currency to maintain its value below its long-term equilibrium value.