Which of the following is NOT a characteristic of a perfectly competitive long-run equilibrium?
A) Firms are earning zero profits.
B) Price equals marginal cost.
C) Price equals long-run minimum average cost.
D) Firms are producing on the downward sloping portions of their short-run average cost curves.
Answer: D
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Which of the following would result in a positive externality?
A) A local government sets a maximum price on gasoline. B) Taco Bell adds 15 new items to its dollar menu. C) Medical research results in a cure for Ebola. D) A solar panel manufacturer raises its prices due to increased demand.
Human capital is
a. an important determinant of wages, but it does not affect the production of goods and services. b. an important determinant of wages, and it affects the production of goods and services. c. a specific type of physical capital made by humans rather than machines. d. very different from physical capital in that physical capital represents an investment, while human capital does not represent an investment.