A new technology is developed for producing microwave ovens that reduces production costs by 10%. Which of the following is the most likely consequence of this technological change?
A. Firms will continue to operate efficiently as long as no firm adopts this new technology.
B. Firms must adopt this new technology to remain efficient.
C. If firms do not adopt this new technology, then the economy will remain in general equilibrium, because firms will not change their price and output decisions.
D. This new technology will not affect efficiency, but it will change the equilibrium price and quantity for this industry.
Answer: B
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A) 20.0 percent B) 50 percent C) 16.7 percent. D) -16.7 percent E) 40.0 percent
The budget line facing a household includes information on
A. prices of two goods and household income. B. household income and the price of money. C. the price of one good and household income. D. the price of two goods but no information on household income. E. preferences of goods at various prices.
Who said this: "The most hated sort, with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural objects of it. For money was intended to be used in exchange, but not to increase at interest…of all modes of getting wealth this is the most unnatural."
A. Aristotle B. Moses C. Benjamin Franklin D. Frank Knight
If a perfectly competitive firm is currently producing where P = MC and MC = ATC, then the firm will earn ________ profits.
A. above normal B. negative C. positive D. zero