Use the following graphs for a perfectly competitive market in the short run to answer the next question.
Which of the following statements is true?
A. The firm is earning a normal profit.
B. The firm should increase production in the short run.
C. The firm is making economic profits.
D. The firm is generating a loss.
Answer: D
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A rise in the domestic interest rate leads to capital
A. outflows and exchange rate appreciation. B. outflows and exchange rate depreciation. C. inflows and exchange rate depreciation. D. inflows and exchange rate appreciation.
All of the following are examples of institutions that promote real economic growth EXCEPT
A) complex rules associated with business licensing used to promote careful business growth. B) patent laws that protect innovation. C) an efficient judicial system used to enforce contracts. D) strong law enforcement used to protect business interests.
If the Fed unexpectedly increases the money supply, real GDP
a. increases because the resulting increase in the interest rate leads to a decrease in investment. b. increases because the resulting decrease in the interest rate leads to an increase in investment. c. decreases because the resulting increase in the interest rate leads to a decrease in investment. d. decreases because the resulting increase in the interest rate leads to an increase in investment. e. decreases because the resulting decrease in the interest rate leads to an increase in investment.
Recall the Application about the marginal cost involved in producing crude oil to answer the following question(s).Recall the Application. Why does the marginal cost of producing crude oil increase as the volume of crude oil increases?
A. The different costs reflect the higher costs of extracting oil at different sources. B. The different costs reflect the different costs of transporting oil to the United States. C. The different costs reflect the higher taxes that the government imposes on higher production of oil. D. The different costs reflect the different exchange rates needed to buy the oil from different countries.