Which of the following could generate economic profits for perfectly competitive firms in the short run, if they initially earn zero economic profits?
A) a fall in demand
B) a unit tax on output
C) an increase in total fixed costs
D) a decrease in input prices
D
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If the Fed buys $100,000 in U.S. government securities from a commercial bank, the bank now has an additional $100,000 of
A) total assets. B) excess reserves. C) actual reserves. D) net worth.
"Price elasticity measures how many more units of a good that consumers will buy given a decrease in price." Do you agree or disagree? Explain
What will be an ideal response?
Refer to the graph shown. An expansionary fiscal policy would be most appropriate when the economy is at point:
A. E. B. B. C. C. D. D.
Marginal cost pricing results in the most desirable mix of goods and services from the consumer's standpoint because
A. Firms are forced to produce at the most technically efficient output level. B. The prices consumers pay are a reflection of the value of the goods and services given up. C. Economic profits are zero. D. Prices are forced down to the lowest possible level.