Explain the long-adjustment process that take place in a monopolistically competitive industry that is earning pure economic profits
What will be an ideal response?
As new firms enter a monopolistically competitive industry in search of profits, the demand curves of profit-making existing firms begin to shift to the left, pushing marginal revenue with them as consumers switch to the new close substitutes. This process continues until profits are eliminated, which occurs for a firm when its demand curve is just tangent to its average total cost curve.
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The elimination of hourly rate assembly line jobs for unskilled workers by robots is an example of
A) involuntary unemployment. B) mismatch unemployment. C) cyclical unemployment. D) turnover unemployment.
The goal of price discrimination is to
a. Convert consumer surplus to producer surplus b. Maximize profits c. Both a and b d. Make pricing decision difficult
Describe the vicious cycle of poverty. What are the consequences of this cycle?
What are the three principles of equity applied to taxation in the text?
What will be an ideal response?