Positive economic profits exist for a firm in the long run if price is above
a. long-run average cost.
b. long-run marginal cost.
c. long-run total cost.
d. long-run variable cost.
a
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An expansionary fiscal policy will result in higher interest rates and will reduce private investment.
a. true b. false
Exhibit 7-15 Long-run average cost
Given the short-run average total cost curves in Exhibit 7-15, what level of output per week minimizes average total cost?
A. 500 units. B. 1,000 units. C. 1,500 units. D. 2,000 units.
Considering only its direct effect on income, contractionary monetary policy tends to:
A. increase a trade deficit and increase the exchange rate. B. decrease a trade deficit and increase the exchange rate. C. increase a trade deficit and decrease the exchange rate. D. decrease a trade deficit and decrease the exchange rate.
For an inferior good,
a. the income effect is greater than the substitution effect. b. the income effect is smaller than the substitution effect. c. the income effect equals to the substitution effect. d. none of the above occurs.