One difference between the long run and the short run in a perfectly competitive industry is that:
A. firms necessarily earn zero economic profit in the long run but may earn positive or negative economic profit in the short run.
B. economic profit in the short run is always greater than it is in the long run.
C. firms necessarily earn positive economic profit in the long run but may earn positive or negative economic profit in the short run.
D. economic profit in the long run is always greater than it is in the short run.
Answer: A
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A temporary decrease in the price of oil would be considered a:
A. long-run supply shock. B. demand shock. C. short-run supply shock. D. The changing price of oil would not affect any of these.
Macroeconomic equilibrium occurs when:
a. Expected supply equals expected demand. b. Actual leakages equal expected injections. c. Actual and expected supply equals actual and depected demand and actual and expected leakages equal actual and expected injections. d. Expected amount supplied equals expected amount demanded, which means expected leakages equal expected injections. e. None of the above.
According to the quantity theory of money, if an economy produces 5,000 units of output, its money supply equals $40,000 and the velocity of money equals one, then the price level will equal:
A. $0.13. B. $1.25. C. $8. D. $200.
A small change in a variable is:
A. an average change. B. a ceteris paribus change. C. an efficient change. D. a marginal change.