Zero economic profits for a perfectly competitive firm in the long run means
a. the firm must exit the industry.
b. the firm is in equilibrium.
c. the firm will shut down until the market improves.
d. average revenue is insufficient to cover long-run average cost.
b
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Suppose you own a proprietorship that is in serious financial difficulty. The assets of the company are $100,000 . but liabilities are $175,000 . You also have, however, stock in General Motors worth $200,000 . If you file bankruptcy, what amount of personal assets do you stand to lose?
a. $100,000 b. $75,000 c. $200,000 d. $275,000 e. $375,000
Unions contribute to
a. cyclical unemployment. b. frictional unemployment. c. seasonal unemployment. d. structural unemployment.
If people decide that some country is now a more risky place to keep their saving, then at the original interest rate in that country there is a
a. surplus of loanable funds, so the interest rate increases. b. surplus of loanable funds, so the interest rate decreases. c. shortage of loanable funds, so the interest rate increases. d. shortage of loanable funds, so the interest rate decreases.
When something happens to the economy, monetarists ask two questions:
A. What does this do to government spending, and what does it do to tax revenues? B. What does this do to real GDP, and what does it do to the price level? C. What does this do to investment spending, and what does it do to net exports? D. What does this do to the money supply, and what does it do to velocity?