The existence of positive economic profits induces firms to:
A. enter an industry, which shifts the market supply curve to the left and decreases market price.
B. enter an industry, which shifts the market supply curve to the right and decreases market price.
C. exit an industry, which shifts the market supply curve to the right and decreases market price.
D. enter an industry, which shifts the market supply curve to the right and increases market price.
Answer: B
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When the economy responds to a supply shock, there is ________ in the short run and ________ in the long run between inflation and unemployment
A) an inverse relationship; no trade-off B) no trade-off; an inverse relationship C) an inverse relationship; an inverse relationship D) no trade-off; no trade-off
If you were a government official and wanted to raise the price of wheat, which of the following actions would you take?
a. Take wheat from government storage and sell it. b. Encourage farmers to use more fertilizer. c. Lower the price of rye. d. Subsidize purchases of farm equipment. e. Encourage farmers to grow less wheat.
The belief that tobacco is a "gateway drug" is consistent with
a. the idea that tobacco and marijuana are substitutes. b. the idea that an increase in income causes a decrease in the demand for tobacco and an increase in the demand for marijuana. c. the idea that lower cigarette prices are associated with less use of marijuana. d. most of the available evidence.
An increase in the wealth of households, other things remaining the same, can result in ____ the consumption function.
A. no effect on B. an upward shift in C. a movement to the left along D. a downward shift of