In Figure 23

question 115

Multiple Choice

In Figure 23.3, diagram "a" presents the cost curves that are relevant to a firm's production decision, and diagram "b" shows the market demand and supply curves for the market.Use both diagrams to answer the following question: If the market demand curve is D2 in Figure 23.3, then in the long run,

• A) Economic profit is less than zero, and firms will exit.
• B) Economic profit is greater than zero, and firms will expand production.
• C) There are zero economic profits, so there will be no entry or exit.
• D) There are zero economic profits, so firms will exit.

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Definitions:

OASDI

The Old-Age, Survivors, and Disability Insurance program, part of the U.S. Social Security system, providing benefits to eligible retirees, their families, and the disabled.

Medicare

A federal health insurance program in the United States for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease.

Maximum Earnings Limits

The ceiling on the amount of earnings on which certain taxes or contributions, such as Social Security in the United States, are required.

FICA-Medicare

A federal insurance contribution act tax specifically designated for Medicare, a portion of the payroll tax paid by employees and employers to fund the Medicare program.