In the long run, any perfectly competitive firm that produces will choose a quantity such that
A. price is greater marginal cost.
B. long run marginal cost is less than short run marginal cost.
C. short run average cost is minimized.
D. long run total cost is minimized.
Answer: C
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In comparing the returns on U.S. and German Treasury securities, investors
A) should forecast the future dollar/euro exchange rate. B) may disregard the future dollar/euro exchange rate. C) should assume the future dollar/euro exchange rate is the same as today's. D) should assume the euro will depreciate if the German interest rate is above the U.S. interest rate.
If a demand curve shifts, we know that
A) the price of the good itself is not a factor. B) the price of the good itself is a factor. C) the price of the good and supply are the major factors. D) the price of the good and demand are major factors.
The marginal rate of transformation is the
A. dollar value of the best forgone alternative. B. transformation of resources into a form that is useful to people. C. process of using resources to produce new capital. D. slope of the production possibility frontier.
The Social Security tax is regressive because
A. the Social Security tax rate applied does not rise with the salary level. B. each individual must pay a set percentage of his or her income in Social Security taxes. C. as income increases, the Social Security tax rate increases at a decreasing rate. D. no Social Security tax is collected for incomes in excess of a "cap" income level.