Paul the Pizza Man used a new method to streamline pizza assembly that allowed him to make more pizzas and thus make greater revenue. Paul began to earn positive economic profits. In the long run, Paul will
a. continue to earn economic profits
b. earn zero economic profits because other pizza places will begin to use his system
c. continue to earn economic profits because Paul will get a patent on his new method
d. earn negative economic profits because innovators always loose money
e. earn zero economic profits because the government does not allow monopolistically competitive firms to earn economic profits
B
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Economic profits and the performance of stock
A) are independent of each other. B) are negatively related. C) are positively related. D) are positively related only during downturns in the business cycle.
Which of the following groups are typically harmed by unexpected inflation?
a. lenders b. borrowers c. pensioners on fixed incomes d. both (a) and (c).
Lars almost always use SpeedyStop gas station because it is close to his home. What type of product differentiation is he being influenced by?
a. physical differences b. prestige c. location d. service
A firm is currently producing 1140 units of output according to the production function q = L4/3K1/2 and faces input prices equal to w = $20 and r = $80. In the short run, capital is fixed at 5 units. In the long run, the firm's costs are
A) lower because the firm substitutes towards more labor and away from capital. B) lower because the firm substitutes towards more capital and away from labor. C) higher because the firm substitutes towards more labor and away from capital. D) higher because the firm substitutes towards more capital and away from labor.