In the long run, a perfectly competitive firm
A) can make either an economic profit or a normal profit.
B) incurs an economic loss.
C) makes zero economic profit.
D) can make an economic profit, zero economic profit, or incur an economic loss.
E) makes an economic profit.
C
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Do automatic fiscal stabilizers eliminate business cycles?
A) Yes B) No, because they have no effect if the business cycle is the result of some unanticipated change C) No, but they do moderate business cycles D) No, they increase the likelihood that a business cycle occurs E) No, they make business cycle fluctuations more severe
Consider the case of a teacher who tells students that those who miss more than three classes for any reason will automatically receive a lower grade
A) This is an example of a positive incentive for students to attend class. B) This is an example of a negative incentive for students to attend class. C) The teacher is assuming that students are irrational, and she must force them to attend class. D) Students who miss more than three classes are irrational.