Which of the following steps should Bufton Dairy, a firm selling dairy products, take in order to earn positive economic profits?
a. Offering products that are identical to those of its rivals
b. Producing at the highest point on its average total cost curve
c. Acquiring most of its rivals
d. Selling only one dairy product
c
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“Plowback” is a preferred source of financing a corporation because
A. the funds are easier to obtain, compared to issuing stocks. B. it is not subject to double taxation. C. selling bonds involves the high cost of money. D. stock markets are subject to random walks.
Refer to the accompanying figure.
Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating ________ gap.
A. A; a recessionary B. B; no output C. B; expansionary D. D; an expansionary