If economic profits in a particular industry increase, then we would expect:
A. Resources to be diverted away from that industry
B. Firms in that industry to produce less output
C. Firms to enter that industry thus expanding it
D. Consumers to buy less from that industry
Answer: C
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In the above figure, when the efficient quantity is produced the marginal social cost of the last magazine is
A) $1. B) $3. C) $5. D) some amount not given in the above three answers.
On the graph above, suppose the economy is at point 1. Which sequence of points best illustrates the short-run and then long-run impacts if taxes are reduced for one year, then returned to the original level? [Assume that potential output remains
constant at .] A) 7, 2, 5 B) 2, 4, 1 C) 2, 7, 6 D) 7, 8, 1
Assuming the economy is in a recession, Keynesian economists predict that lower wages will shift the short-run aggregate supply curve rightward
a. True b. False Indicate whether the statement is true or false
A reduction in the marginal propensity to import will cause
A) the ZZ line to become flatter and a given change in government spending (G) to have a larger effect on domestic output. B) the ZZ line to become flatter and a given change in government spending (G) to have a smaller effect on domestic output. C) the ZZ line to become steeper and a given change in government spending (G) to have a larger effect on domestic output. D) the ZZ line to become steeper and a given change in government spending (G) to have a smaller effect on domestic output.