Exhibit 8-6 A firm's cost and MC curves
In Exhibit 8-6, if this firm is currently producing 20 units of output, this firm is
A. earning a profit of $10.
B. earning a profit of $.50.
C. losing $10.
D. losing $0.50.
Answer: A
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If the base year CPI market basket costs $250 and next year the CPI market basket costs $275, what is next year's CPI?
What will be an ideal response?
Efficiency wages cause unemployment because
A) firms pay wages that are above the market wage, causing the quantity of labor demanded to be greater than the quantity of labor supplied. B) firms pay wages that are above the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied. C) firms pay wages that are below the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied. D) firms pay wages that are below the market wage, causing the quantity of labor demanded to be greater than the quantity of labor supplied.
Generic Drug Industry Dynamics When a brand name drug's patent protection expires, many generic producers are usually ready to enter the market. These firms' products are close substitutes, they have similar production technologies, the regulatory
hurdles to enter are not so great, and, within a few months, there are plenty of rivals. What would you predict for the profitability during these first few months after generic drug entry?
Which statement is true?
A. Foreigners are holding over $1 trillion in U.S. currency (which they have not invested in the U.S.). B. If foreigners keep buying U.S. assets, we will run out of things to sell before the year 2025. C. Within 10 years the United States will probably go bankrupt. D. None of these statements are true.