In the long run, a perfectly competitive firm can
A) only make an economic profit.
B) only make zero economic profit.
C) only incur an economic loss.
D) make an economic profit, make zero economic profit, or incur an economic loss.
B
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If the MPS equals 0.25 and the MPI is 0.15, then an initial change in investment spending of $250 million will result in a total change in equilibrium real GDP of $625 million
a. True b. False Indicate whether the statement is true or false
A firm is indifferent between staying in business and shutting down in the short run when, at the loss-minimizing level of output,
a. total revenue equals total cost b. average total cost is at its minimum c. total revenue exceeds total cost d. total revenue equals total variable cost e. total variable cost equals total cost
If the marginal propensity to save is 0.1 and government spending is raised by $5 billion, then total aggregate spending will rise by:
A. $500 million. B. $5 billion. C. $10 billion. D. $50 billion.
When supply and demand for a product increase simultaneously, we
A. cannot predict the market clearing price, but know that the equilibrium quantity will increase. B. can predict that both the market clearing price and the equilibrium quantity will increase. C. can predict that both the market clearing price and the equilibrium quantity will decrease. D. cannot predict the change in either the equilibrium quantity or the market clearing price.