In a perfectly competitive market in which all firms are maximizing their economic profits, the demand and supply curves intersect at a price of $8. From this we know that each
A) firm's average total cost of producing the good is $8.
B) firm's average variable cost of producing the good is $8.
C) firm's marginal cost of producing the good is $8.
D) firm is earning positive economic profits at a price of $8 or more.
Ans: C) firm's marginal cost of producing the good is $8.
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Larger increases in the demand for labor than in the supply of labor explain:
A. the slowdown in real wage growth. B. skill-biased technological change. C. the substantial increase in real wages. D. increasing wage inequality.
A corporate bond is not as liquid as cash because the bond
A) cannot be converted to spendable dollars either until it matures or is sold to another investor. B) can be exchanged only for the goods or services produced by the company that issued the bond. C) must be exchanged for a stock certificate before it can be converted to spendable funds. D) represents an exchange for gold only.
Most people will eliminate the F's and any D's that they can before reaching the 2.5 constraint, make an application to the world's income distribution using John Rawl's terms "veil of ignorance," "economic justice," and "poorest of the poor."
What will be an ideal response?
The interest rate effect and real wealth effect are important because they help to explain
A. why demand management policy cannot be used effectively when aggregate supply shifts to the left. B. the downward-sloping nature of the aggregate demand curve. C. why equilibrium real GDP rarely coincides with potential real GDP. D. why the aggregate demand curve may shift inward or outward.