As a result of a decline in the expected rate of return on investment, GDP would not have to fall if the government __________ taxes or __________ government spending

Peter's Pencils is a perfectly competitive company producing pencils. Suppose Peter is producing 1,000 pencils an hour. If the total cost of 1,000 pencils is $500, the market price per pencil is $2, and the marginal cost is $2, then Peter

A) makes an economic profit because marginal revenue is equal to marginal cost at this output level. B) should decrease his output to increase his profit. C) is maximizing his profit and is making an economic profit. D) should increase his output to increase his profit. E) is not maximizing his profit but is making zero economic profit anyway.

Does the proprietor of a grocery store who owns the building in which his business is located have lower costs than a grocery store proprietor who must pay rent for the building in which his store is located?

A) No, because no two businesses will be exactly the same. B) No, because the owner-proprietor loses the rent he could otherwise have been paid. C) Yes, because he can afford to set lower percentage markups. D) Yes, if the cost saving is not offset by higher expenses in other areas.