A firm will make a profit when
A) P > AVC.
B) P > ATC.
C) P = ATC.
D) P = MC.
Answer: B
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The infant industry argument is valid when
A. a new industry is suffering financial losses. B. a new industry is less efficient than foreign competitors. C. the industry’s prospective gains are sufficient to repay the social losses incurred while it is being protected. D. the industry is not likely to be profitable in the future.
In rational expectations theory, the term "optimal forecast" is essentially synonymous with
A) correct forecast. B) the correct guess. C) the actual outcome. D) the best guess.
The concept of "lender of last resort" is that when
a. lending decreases, the Fed will be the last to resort to higher interest rates. b. borrowing increases, the Fed will be the last to increase lending. c. commercial banks are hesitant to lend, the Fed will step in and increase reserves. d. a borrower has tried everyone else, the Fed will lend directly to them.
Jacqueline, a brilliant new Ph.D. in economics, has turned down many job offers because she hopes eventually to teach at one of the top ten universities in her field. What type of unemployment is she experiencing?
What will be an ideal response?