When a perfectly competitive firm experiences positive economic profits in the short run
A. the high barriers to entry prevent further competition.
B. existing firms exit the industry.
C. new firms enter the industry.
D. firms have no incentive to exit or enter the industry.
Answer: C
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Rare earth metals are used to manufacture some important electronic components in popular products like cell phones. These metals are not really rare, but they are expensive to extract from the ground
What happens to the market for the rare earth metals if these extraction costs increase? A) Demand curve shifts leftward B) Demand curve shifts rightward C) Supply curve shifts leftward D) Supply curve shifts rightward
According to the theory of efficient markets, mutual fund managers may be expected to earn above-average returns if they:
A. take on less risk. B. participate in efficient markets. C. have access to illegal, private information. D. have learned from investing in the same stocks repeatedly.
By subsidizing the provision of public education, the government
A. pushes the per-unit price that producers of educational services receive above the market clearing price. B. pushes the per-unit price that consumers pay for educational services below the market clearing price. C. generates an increase in the quantity of educational services demanded. D. All of these.
The corporate income tax in the United States
A) excludes dividends paid out. B) only taxes retained earnings. C) results in individuals' being doubly taxed on corporate earnings. D) does not apply to profits earned on exports.