A firm will go out of business if price is below
A. marginal cost.
B. marginal revenue.
C. average total cost.
D. average fixed cost.
C. average total cost.
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Refer to Figure 27-1. Suppose the economy is in short-run equilibrium above potential GDP and no policy is pursued. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) D to C. B) C to D. C) E to A. D) C to B. E) A to E.
Moral Hazard describes a situation in which
a. buyers or sellers react to market signals by altering their behavior in ways that generate adverse market outcomes b. an action by an individual that endangers others c. an activity destroys all market outcomes d. rational behavior is removed from market decision making e. irrational behavior creates perverse market outcomes
The long-term supply of labor
A. can vary from region to region but does not change within a region. B. does not depend on location as flows of workers between regions cancel each other out. C. depends on location, as some regions are more attractive to workers. D. generally does not vary much from region to region.
A patent
A) grants the creator of a book, film, or piece of music the exclusive right to use the creation for 20 years. B) grants the creator of a book, film, or piece of music the exclusive right to use the creation during the creator's lifetime. C) gives a firm the exclusive right to a new product for 20 years from the date the patent application is filed with the government. D) gives a firm the exclusive right to a new product during the product inventor's lifetime.