Which is necessarily true for a purely competitive firm in short-run equilibrium?
A. Marginal revenue minus marginal cost equals zero
B. Price minus average total cost equals zero
C. Total revenue minus total cost equals zero
D. Marginal revenue is zero
A. Marginal revenue minus marginal cost equals zero
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Suppose a Big Mac costs $4.20 in the United States and 9.55 zlotys in Poland. If the exchange rate is 2.77 zlotys per dollar, purchasing power parity predicts that
A) the dollar is undervalued. B) the zloty is undervalued. C) the zloty is overvalued. D) both the dollar and the zloty are undervalued.
A simple model of information acquisition for shopping predicts that, the larger the percentage of dealers in an area seen by the typical shopper, the _____ will be the dispersion of the prices _____ relative to their average
a. larger; the buyers pay b. larger; the dealers quote c. smaller; the buyers pay d. smaller; the dealers quote
The study by economists Cox and Alm found that the 2006 after-tax income of the richest fifth of U.S. households is
a. equal to the after-tax income of the poorest fifth. b. 7 times the after-tax income of the poorest fifth. c. 14 times the after-tax income of the poorest fifth. d. 21 times the after-tax income of the poorest fifth.
If a price ceiling is imposed above the equilibrium price, what is the effect?
a. There is no visible effect on the market outcome. b. A shortage results. c. A surplus results. d. The quantity demanded will decrease.