In the long run, firms in a perfectly competitive market will:
A. exit if the price is lower than their lowest average total cost.
B. attract other firms to the market if the price is equal to their lowest average total cost.
C. not attract other firms if they are earning slightly positive economic profits.
D. earn positive economic profits.
A. exit if the price is lower than their lowest average total cost.
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An increase in government spending will have the greatest expansionary impact on the economy if it is combined with:
a. an increase in tax revenue equal to the increase in spending. b. a decrease in tax revenue equal to the increase in spending. c. unchanged tax revenue. d. none of these is true.
First-mover advantage is:
A. more important to those who have less to bargain with. B. more important in a repeated sequential game than in a one-round sequential game. C. more important in a repeated game than in a sequential game. D. more important in an ultimatum game than in a repeated game.
Innovations such as the microchip and the Internet lead to business cycle variations because:
A. they cause prices to be sticky. B. significant innovations occur irregularly and unexpectedly. C. the central bank will often change the money supply in response. D. they cause prices to be flexible.
If a product?s demand increases as its supply simultaneously decreases, the marginal revenue product curve will
A. shift to the right. B. remain unchanged. C. shift to the left. D. either shift to the left, shift to the right, or remain unchanged depending upon what happens to product price.