The corn market is perfectly competitive, with thousands of corn farmers. In the 2000s, the price of corn soared so that new farmers entered the corn market
Initially, entry ________ the economic profit of the initial corn farmers and in the long run the initial corn farmers ________. A) increased; made an even greater economic profit than initially
B) decreased; made zero economic profit
C) increased; made zero economic profit
D) decreased; incurred an economic loss
E) increased; made an economic profit
B
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If the nominal interest rate in an economy is 8% and the real interest rate is 4%, the inflation in the economy is:
A) 4%. B) 32%. C) 12%. D) 8%.
A bank failure is less likely to occur when
A) a bank holds less U.S. government securities. B) a bank suffers large deposit outflows. C) a bank holds fewer excess reserves. D) a bank has more bank capital.
The term "crowding out" refers to the phenomenon that occurs when increased government spending
A) raises the price level and reduces consumption. B) leads to higher interest rates which reduces private investments. C) leads to higher bond prices which decreases the demand for Treasury bonds. D) leads to increased budget deficits that ultimately warrant increases in income taxes.
Which of the following is a public assistance or welfare program as opposed to a social insurance program?
A. Supplemental Security Income (SSI). B. Unemployment compensation. C. Medicare. D. Social Security.