In the long run, firms in a perfectly competitive market produce:
A. at a quantity with positive economic profits.
B. where average variable costs are minimized.
C. where MC is at its lowest point.
D. where price equals marginal cost.
Answer: D
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If the federal budget is initially balanced and government expenditures remain constant, then a decrease in GDP will
A) decrease tax revenues and create a budget surplus. B) increase tax revenues and create a budget surplus. C) decrease tax revenues and create a budget deficit. D) increase tax revenues and create a budget deficit.
Which of the following is true?
A) A bank is solvent when its deposits become positive. B) A bank is insolvent when its reserves become negative. C) A bank is solvent when its excess reserves become negative. D) A bank is insolvent when its net worth becomes negative.