Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point A. The opportunity cost of moving from Point A to Point B is the
A. 30 LCD televisions that must be forgone to produce 60 additional OLED televisions.
B. 90 LCD televisions that must be forgone to produce 20 additional OLED televisions.
C. 30 LCD televisions that must be forgone to produce 20 additional OLED televisions.
D. 120 LCD televisions that must be forgone to produce 40 additional OLED televisions.
Answer: C
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The above figure shows the cost curves for a perfectly competitive firm. If all firms in the market have the same cost curves and the price equals $16 per unit
A) the market is in its long-run equilibrium. B) over time, firms will leave this market. C) the firm is making zero economic profit. D) over time, the price will fall as new firms enter the market.
If a recession were to reduce the demand for loans, ceteris paribus,
A) the interest rate will increase. B) the interest rate will not change. C) the interest rate will decrease. D) the number of loans will increase.