Under perfect competition, existing firms leave the market in the long run if the price falls below total fixed cost
a. True
b. False
Indicate whether the statement is true or false
False
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If capital deepening increases from $100 to $150 and this increase results in worker's productivity increasing from $60 to $70, and if there were 100 workers, then GDP would increase by
a. $10,500 b. $6,000 c. $1,500 d. $7,000 e. $1,000
When entry barriers into a market are low, firms will tend to earn zero economic profit in the long run because
a. low entry barriers lead to rising costs. b. profit-seeking entrepreneurs will not enter a market when entry barriers are low. c. short-run profit attracts additional suppliers and drives down the market price. d. consumers will refuse to pay more than the cost of producing a good once they find out the producer's per-unit costs.
Ben is exhausting his money income consuming products A and B in such quantities that MUa/Pa = 5 and MUb/Pb = 8. Ben should purchase:
A) more of A and less of B. B) more of B and less of A C) more of both A and B. D) less of both A and B.
If the secular trend of labor productivity is 3 percent per year, the number of years that it will take for the standard of living to double will be about:
A. 23 years. B. 20 years. C. 15 years. D. 17 years.