In a perfectly competitive market, a(n) ________ occurs because ________
A) efficient outcome; total surplus is maximized
B) deadweight loss; firms minimize average minimum cost
C) efficient outcome; the fair rules condition is met
D) deadweight loss; firms must be price takers
E) deadweight loss; total surplus is minimized
A
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Refer to Figure 12-1. If the firm is producing 700 units
A) it should cut back its output to maximize profit. B) it is making a loss. C) it is making a profit. D) it should increase its output to maximize profit.
Under the adaptive expectations hypothesis, how will a shift to a more expansionary monetary policy affect the economy?
a. In the short run, the real rate of output will be unaffected, but in the long run, it will increase. b. In the short run, the real rate of output will increase, but in the long run, it will be unchanged. c. There will be a permanent increase in the real rate of output, but the inflation rate will also be a little higher. d. In the short run, the impact on the real rate of output is uncertain, but in the long run, output will increase.