As the price level in the economy decreases, which of the following sequence of events occurs?
A) Md? r? AD?
B) Md? r? AD?
C) Md? r? AD?
D) Md? r? AD?
Ans: D) Md? r? AD?
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If Henry, a perfectly competitive lime grower in Southern California, can sell his limes at a price greater than his average total cost, Henry will
A) incur an economic loss. B) incur an accounting loss. C) have an incentive to shut down. D) make an economic profit. E) make zero economic profit.
The tournament effect
A) may help explain why CEO are highly paid. B) why most golfers are below average. C) explains why the behavior of total revenue often patterns lottery sales. D) may help explain why CEOs are generally viewed as dishonest by the public.
f the government imposes a price floor of $6 on this market, then there will be
A. a surplus of 20 units. B. a surplus of 30 units. C. no surplus. D. a surplus of 40 units.
For the purpose of statistically reporting the unemployment rate, "discouraged workers" are:
A. counted. B. not counted. C. offered other jobs. D. trained to do different work.