If a firm shuts down in the short run
A) its loss equals zero.
B) its loss equals its fixed cost.
C) is makes zero economic profit.
D) its total revenue is not large enough to cover its fixed cost.
Answer: B
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One reason that the Phillips curve “broke down” is that it
A. is unable to explain short-run movements in inflation and unemployment, but does a better job of explaining long-run movements. B. assumes a quick-acting self-correcting mechanism, and the economy has a very slow self-correcting mechanism. C. is a statistical relationship, and some of the points are not sustainable in the long run. D. cannot explain demand-side inflation, and it collapsed when demand-side inflation was predominant in the 1970s.
If the HHI for an industry equals 3,200,
A) firms in the industry are most likely to make zero economic profit B) the industry is probably an oligopoly C) firms in the industry are likely to act independently of each other D) firms in the industry must enter a cartel in order to earn an economic profit E) the industry is almost surely monopolistic competition
In recent decades, the trend among central banks has been to adopt ________
A) high employment as a central goal B) a dual mandate that gives equal weight to both price stability and low unemployment. C) price stability as a central goal D) a target of zero inflation E) none of the above
Lower taxes on businesses will shift the aggregate:
A. demand curve rightward. B. demand curve leftward. C. supply curve rightward. D. supply curve leftward.