In a long-run equilibrium in a perfectly competitive market, firms are selling at a price equal to average cost
a. True
b. False
Indicate whether the statement is true or false
True
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Sammy has a drone that he values at $1,500. Frank values the same drone at $1,000. The government offers a subsidy of $800 to the buyers of drones, and Sammy and Frank agree on a price of $1,600. The subsidy creates a deadweight loss of
A) $0 B) $200 C) $500. D) $800.
If real interest rates decrease, the _____
a. investment spending function shifts upward b. investment spending function shifts downward c. consumption function rotates upward d. consumption function shifts upward
John only had $40 to spend and couldn't decide whether to buy a new pair of jeans or to go to an amusement park. He finally decided to spend his money on the amusement park. What was the opportunity cost of his decision?
A. $40 B. New pair of jeans C. Trip to amusement park D. No opportunity cost was involved.
Gross domestic product (GDP) includes:
A. intermediate as well as final goods. B. foreign goods as well as domestically produced goods. C. used goods sold in the current time period. D. only final goods and services.