In long-run equilibrium, a perfectly competitive firms produces at the output level at which:
a. total revenue is maximized.
b. long-run marginal cost is minimized.
c. average total cost is minimized.
d. short-run variable cost is minimized.
QUESTION 2The largest in-kind transfer received by the poor households in the U.S. is:
a. Old-Age, Survivors, and Disability Insurance.
b. the Head Start special education program for poor children.
c. Medicaid, which provides long-term medical care for the poor.
d. the food stamp program, which distributes food coupons to poor households.
e. Temporary Assistance for Needy Families.
QUESTION 3Mention the factors which have helped South Africa's electricity supplier, Eskom, to reduce transaction costs and distribute electricity cheaply?
QUESTION 4Assume that a firm's marginal revenue curve intersects the rising portion of the marginal cost curve at 100 units of output. At this output level, a profit-maximizing firm's total cost is 1,000 . If the price of the product is 3 per unit and the firm produces at the profit-maximizing level, the firm will earn an economic profit equal to:
a. -1,000.
b. -700.
c. -400.
d. -600.
e. 200.
QUESTION 5Which of the following is not true in the long run under perfect competition?
a. There is no incentive for firms to enter or exit the industry.
b. Economic profit is zero.
c. Long-run marginal cost is minimized.
d. Long-run average total cost is minimized.
QUESTION 6Unemployment insurance provided by the U.S. government is usually funded by:
a. the excise duties imposed on the import of foreign goods.
b. the national tax on payrolls levied on firms.
c. external borrowing by the U.S. government.
d. printing new money.
e. selling off government bonds.