A monopolistic ally competitive firm is producing at an output level in the short run where average total cost is $4.50, price is $4.00, marginal revenue is $2.50, and marginal cost is $2.50. This firm is operating:
A. With positive profits
B. With a loss
C. At the break-even point
D. At a non-optimal level of output
B. With a loss
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Suppose that the inflation rate has been 3 percent per year for several years, and the unemployment rate has been stable at 5 percent. Unanticipated changes in government policy cause the inflation rate to increase to 6 percent
In the short run, we would expect the unemployment rate to A) increase, but the exact amount cannot be known for sure. B) decrease. C) increase to 10 percent. D) remain constant.
A rent ceiling set below the equilibrium rent decreases the quantity of housing supplied because
A) landlords of previously barely profitable apartments refuse to rent them. B) the supply of housing increases. C) fewer tenants will search for housing. D) demand for housing will increase. E) the supply curve of housing immediately shifts leftward.