If the firms in a market are earning an economic profit, then, in the long run, the market ________ curve will shift to the ________.
A. supply; right
B. demand; left
C. supply; left
D. demand; right
Answer: A
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The total value of the goods and services produced over a period of time represents an economy’s
a. planned savings. b. total income. c. total wealth. d. capital.
What impact does an increase in the price level in the United States have on net exports and why?
A) An increase in the price level decreases net exports by increasing the relative cost of American goods. B) An increase in the price level increases net exports because higher prices decrease American spending on imports. C) An increase in the price level decreases net exports because higher prices decrease the value of the dollar. D) An increase in the price level increases net exports because higher prices lower the value of the dollar.
Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
When MR < MC for a firm, the firm should
A) reduce its level of output. B) stay at the same level of output. C) stop producing. D) increase output, unless P < AVC.