Long-run economic profits are possible under
A) perfect competition and oligopoly.
B) monopolistic competition and monopoly.
C) oligopoly and monopoly.
D) monopolistic competition and oligopoly.
Answer: C
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The table above gives the cost schedule for The X Firm. The data show that The X Firm's ________ curve is ________
A) ATC; U-shaped because the firm fixed costs are spread over larger amounts of output and the firm experiences decreasing marginal returns B) AFC; U-shaped because the firm spreads its fixed costs over larger and large amounts of output C) AVC; always declining because costs are divided across ever-increasing amounts of output D) MC; U-shaped because explicit costs exceed implicit costs E) ATC; U-shaped because output increases as costs increase
Costs that require a firm to spend money are considered:
A. fixed costs. B. variable costs. C. explicit costs. D. implicit costs.
In the United States, the official poverty line is based on:
A. the price of housing. B. the price of clothing. C. the price of food. D. the average income of the lowest quartile of income earners.
You are hired by the Bureau of Economic Analogies (BEA) as an economic consultant. The chairperson of the BEA tells you that he believes the current unemployment rate is too high. The unemployment rate can be reduced if aggregate output increases. He wants to know what policy to pursue to increase aggregate output by $200 billion. The best estimate he has for the MPC is 0.6. Which of the following policies should you recommend?
A. reduce taxes by $150 billion and decrease government spending by $100 billion B. increase government spending by $80 billion C. increase taxes by $133.33 billion D. reduce the budget deficit by $200 billion