In the long run, a monopolistically competitive firm will produce where:
a. average cost equals price.
b. average cost equals marginal revenue.
c. marginal revenue equals price.
d. marginal cost equals price.
Ans: a. average cost equals price.
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The South's post-Civil War backwardness was due to all of the following except
(a) extensive wartime destruction of life and property. (b) the fiscal disaster of the Confederacy, whereby nine tenths of the state banks in the South vanished. (c) the price of cotton was increasing, as it had prior to the Civil War, thus keeping cotton profitable and discouraging investors in the South from developing a modern manufacturing system. (d) the failure of the sharecropping system to provide incentives for innovation and progress in agriculture.
A price index is designed to measure
a. changes in the general level of employment across time periods. b. changes in the quantity of output produced across time periods. c. the market value of output produced during the current period with the value of output produced during an earlier time period. d. the cost of buying a market basket of goods at a point in time relative to the cost of buying the same market basket during an earlier time period.