In long-run equilibrium, every perfectly competitive firm
a. maximizes its output
b. chooses its plant size and output level to operate at minimum long-run marginal cost
c. chooses its plant size and output level to operate at minimum long-run average total cost
d. earns an economic profit
e. suffers an economic loss
C
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Why is GDP not a good measure of aggregate welfare?
A. GDP includes the value of intermediate goods B. trade between countries is not included in GDP C. GDP does not include the value of production done in the home D. the government calculates GDP
Refer to the accompanying figure. Suppose the solid line shows the current demand curve for coffee. In response to an announcement that much of next year's coffee crop has been destroyed by a storm in Brazil, you should expect:
A. neither a change in quantity demanded nor a shift in demand because next year's coffee crop will not affect the current demand for coffee. B. an increase in the quantity of coffee demanded, but no shift in the demand curve. C. the demand curve to shift to D(B) in anticipation of higher future prices. D. the demand curve to shift to D(A) in anticipation of higher future prices.