In a competitive market where firms are earning economic profits, which of the following should be expected as the industry moves to long-run equilibrium, ceteris paribus?
A. A higher price and fewer firms.
B. A higher price and more firms.
C. A lower price and more firms.
D. A lower price and fewer firms.
Answer: C
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Compared with fiscal policy, monetary policy is:
a. more depenent on congressional actions b. quicker and easier to implement c. slower and more cumbersome to implement d. more likely to produce an offsetting net export effect
If your real income falls during a period of inflation, then your nominal income might have
A) increased more rapidly than the price level. B) increased at the same rate as the price level. C) increased more slowly than the price level. D) decreased more slowly than the price level. E) More information is needed to determine if your nominal income increased more slowly, more rapidly, or at the same rate as the price level.
A company has designed an alarm clock that "runs and hides" after going off, forcing the person to get up and find the alarm clock if he or she wants to shut off the alarm. According to behavioral economists:
A. it is unlikely to alter people's tendency to shut off the alarm and ultimately oversleep. B. the alarm clock keeps people from hitting the snooze button and taking advantage of the availability heuristic. C. the alarm clock serves as a precommitment device, helping the user to stick to the originally planned wake-up time. D. overconfidence effects will discourage use of such devices.
In a competitive economy, workers will be paid according to their
A. marginal productivity. B. status. C. need. D. age.