When do new firms tend to enter a competitive industry?
a. When the large firms in the industry are earning zero profit.
b. When the smaller firms are leaving the industry.
c. When the new entrants can earn positive profits.
d. When there is an absence of fixed costs in the long run.
c. When the new entrants can earn positive profits.
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If a monopoly wants to sell a larger quantity, it must
A) set a higher price. B) maintain the current price. C) set a lower price. D) implement new technology. E) increase the barrier to entry that protects it.
A shortage will occur whenever
A) price is below the equilibrium price. B) price is above the equilibrium price. C) price is equal to the equilibrium price. D) the supply curve is upward sloping.
Economists believe that individuals respond in a predictable way to changes in costs and benefits. The term that best describes this belief is
a. opportunity cost b. demand c. supply d. scarcity e. rational behavior
Which of the following is a component of the Bipartisan Campaign Reform Act?
a. Requiring the disclosure of campaign contributor names b. Making federal funds available to presidential candidates c. Limiting the number of campaign ads that can be run on television d. Removing the ban on union contributions to political parties