If a firm makes zero economic profit, then the firm
A) has no incentive to stay in the industry.
B) is better off exiting the industry.
C) is indifferent between staying and exiting the industry.
D) will shut down.
C
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In the macroeconomic short run
A) actual real GDP may be less than or more than potential GDP. B) the unemployment rate is zero. C) by definition, the economy is always moving away from full employment. D) actual real GDP always equals potential GDP.
Assume a firm is operating in a purely competitive market facing an upward-sloping long-run supply curve
If the industry is currently making pure economic profit what adjustment processes would take place in this market? What would happen to the industry supply curve, equilibrium quantity and equilibrium price?
If the federal budget has an actual budget surplus of $75 billion, but a cyclically adjusted budget surplus of $50 billion, then the economy must be above potential real GDP
Indicate whether the statement is true or false
Joey cuts lawns during the summer. Let q equal the number of acres mowed per day, and let L equal the number of hours worked per day
Joey never works more than eight hours per day, and during that time his short-run production function is q = 0.2 ? L. Which of the following statements is FALSE? A) Joey's marginal product equals his average product. B) Joey's marginal product diminishes by 0.2 for each additional hour worked. C) Joey's average product is constant. D) Joey's marginal product is constant.