To maintain profit, entrepreneurs must:
A. maintain only one product.
B. continually improve their products.
C. eliminate all competition.
D. keep raising prices.
Answer: B
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Simplified trend models are generally appropriate for predicting the turning points in an economic time series
a. true b. false
A sustained decrease in the average of all prices of goods and services in the economy is known as
A. deflation. B. inflation. C. disinflation. D. hyperinflation.
Assume a machine that has a useful life of only one year costs $2,000. Assume, also, that net of such operating costs as power, taxes, and so forth, the additional revenue from the output of this machine is expected to be $2,300. If the firm finds it can
borrow funds at an interest rate of 10 percent, the firm should: A. not purchase the machine because the expected rate of return exceeds the interest rate. B. not purchase the machine because the interest rate exceeds the expected rate of return. C. purchase the machine because the expected rate of return exceeds the interest rate. D. purchase the machine because the interest rate exceeds the expected rate of return.
A natural monopoly is a desirable market structure because
A. It allows the producer to deliver products to the market at the lowest possible cost. B. It allows the producer to earn greater profit than is possible under competition. C. The jobs it creates pay higher wages than those in a competitive industry. D. It allows the producer to deliver a higher-quality product to the market.