In short-run equilibrium for a competitive firm:
A. price will not equal marginal revenue.
B. marginal revenue will be greater than marginal cost.
C. price will equal marginal cost.
D. price will be greater than marginal cost.
Answer: C
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The Fed's inability to instantaneously observe changes in inflation and economic growth result in
A) information lag. B) impact lag. C) policy lag. D) jet lag.
During the early 1930s, the Fed was reluctant to rescue nonsolvent banks out of fear of encouraging:
A) moral hazard B) adverse selection C) bank run D) sovereign debt crisis
Collusion occurs when
a. a firm chooses a level of output to maximize its own profit b. firms get together to maximize joint profits c. firms refuse to follow their price leaders d. firms petition their U.S. senators for favors e. two firms' price and output decisions come into conflict
In a perfectly competitive industry
A. there is apt to be a shortage of sellers of output. B. firms can never make an economic profit. C. no buyer or seller can influence the market price. D. each firm is a price maker.