In the long-run equilibrium of a market with free entry and exit, if all firms have the same cost structure, then
a. marginal cost exceeds average total cost.
b. the price of the good exceeds average total cost.
c. average total cost exceeds the price of the good.
d. firms are operating at their efficient scale.
d
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As the term “opportunity cost” is defined in the text, the opportunity cost of going to college includes
A. both tuition and the value of the student’s time. B. tuition but not the value of the student’s time, which is a cash cost. C. the value of the student’s time but not tuition, which is a monetary cost. D. neither tuition nor the value of the student’s time, since obtaining a college degree makes one’s income higher in the future. E. neither tuition nor the value of the student’s time, at least at subsidized state universities.
Figure 4.3 illustrates the demand for tacos. A decrease in the demand for tacos is represented by the movement from
A) point a to point b. B) point c to point b. C) D2 to D1. D) D0 to D1.
Explain why "good news for the economy is bad news for bond prices."
What will be an ideal response?
Core inflation:
A. measures the changes in prices for the entire market basket of the average urban consumer. B. is inflation measured using the producer price index. C. measures price changes for the market basket of the average urban consumer with food and energy costs taken out. D. is inflation measured using the retail price index.