Whenever firms in a perfectly competitive market produce the output level where marginal revenue equals marginal cost, we know that the firm is earning an economic profit

The marginal cost to a student of missing a class meeting in Introductory Economics increases when

A) textbook prices increase. B) tuition rates increase. C) valuable information is communicated in the class meetings. D) any of the above occurs.

Because of low unemployment rates in the country, employers offer higher wages. To meet their higher payroll costs and maintain profits, they charge consumers more for goods and services. What are the likely consequences?

(A) A wage-price spiral of ever-increasing prices. (B) Increasing numbers of people living on a fixed income. (C) Demand-pull inflation. (D) A prolonged period of deflation.