Starting from long-run equilibrium, a sharp drop in oil prices results in ________ output in the short run and ________ output in the long run.
A. lower; higher
B. higher; higher
C. higher; potential
D. lower; potential
Answer: C
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In the short run, a profit-maximizing firm will shut down if its total revenue is greater than its variable costs
Indicate whether the statement is true or false
One firm previously operated as a monopoly. Now, one potential entrant exists. Consumers would prefer
A) entry, and the firms to split the output equally. B) no entry, and for the incumbent to produce the Stackelberg leader level of output. C) entry, and for the incumbent to produce the Stackelberg leader level of output. D) no entry, and the monopoly to continue.
Since the U.S. is organized as a market economy, the government sector does not play any role in economic activity
a. True b. False Indicate whether the statement is true or false
Which of the following was not a contributing factor to the high rate of bank failures in the 1980s and 1990s?
a. Falling farm prices b. The introduction of Automated Teller Machines (ATMs) c. Falling land values d. Bad loans to Mexico and other less-developed countries e. Risky investments