Under perfect competition, if an industry is characterized by positive economic profits in the short run
a. firms will leave the market in the long run and the short-run supply curve will shift outward.
b. firms will enter the market in the long run and the short-run supply curve will shift outward.
c. firms will enter the market in the long run and the short-run supply curve will shift inward.
d. firms will leave the market in the long run and the short-run supply curve will shift inward.
b
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Price elasticity of demand measures the
A) slope of the demand curve. B) sensitivity of quantity demanded to changes in the price of substitute goods. C) sensitivity of price to changes in the quantity demanded of substitute goods. D) sensitivity of quantity demanded to changes in price.
The negative slope of a production possibilities frontier is a graphic representation of opportunity cost
a. True b. False Indicate whether the statement is true or false
If a new tax policy relatively raises the tax rate 2.5 percent but causes the output supplied to fall by 15 percent, the absolute value of the tax elasticity of supply is
A. 1.5. B. 6.0. C. 37.5. D. 0.375.
The Gini coefficient is
A. the ratio of the percentage of total income received by the top 20% of families to the percentage of total income received by the bottom 20% of families. B. a commonly used measure of the degree of inequity in a property distribution. C. the most common way of representing the income distribution graphically. D. a commonly used measure of the degree of inequality in an income distribution.