In the above figure, at a price of $6, a perfectly competitive firm produces ________ and it ________
A) some output; incurs an economic loss
B) 0; incurs an economic loss
C) 0; does not incur an economic loss or make an economic profit
D) 0; makes an economic profit
A
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Explain what the fallacy of composition is and give an example
What will be an ideal response?
Refer to Figure 16-6. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, and no fiscal or monetary policy is pursued, then at point B
A) the unemployment rate is very low. B) there is pressure on wages and prices to fall. C) income and profits are falling. D) firms are operating at below capacity. E) the economy is below full employment.
If a firm experiences economies of scale,
a. it moves up along the long run average total cost curve. b. expansion of output becomes more expensive for the firm. c. the firm can reduce its per unit cost by producing less. d. the firm must shut down in the long run. e. the firm can reduce its per unit cost by expanding production.
(Consider This) Free products offered by firms:
A. may or may not be free to society but are never free to individuals. B. may or may not be free to individuals but are never free to society. C. are produced and distributed at no cost to society. D. are usually items nobody wants.