A perfectly competitive firm is breaking even. In the short run it should ________. In the long run it should ________.

A. shut down; exit the industry
B. produce where MC = MR; keep the same production level
C. shut down; expand
D. produce where MC = MR; leave the industry


Answer: B

Economics

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The United States produces more services than goods

Indicate whether the statement is true or false

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Suppose that the government imposes a tax on producers equal to the value of the externalities imposed by the good or service. A ______________ elastic demand curve means consumers are less responsive to changes in price and the tax burden will fall more heavily on ______________.

a. more; government b. more; consumers c. less; producers d. less; consumers e. None of the above.

Economics

The deposit multiplier is the inverse of

A) legal reserves. B) excess reserves. C) checkable deposits. D) the required reserve ratio.

Economics

The formula to compute the spending multiplier is:

A. 1 / (MPC + MPS). B. 1 / (1 ? MPC). C. 1 / (1 ? MPS). D. 1 / (C + I).

Economics