Refer to Figure 13-12. If the diagram represents a typical firm in the designer watch market, what is likely to happen in the long run?
A) The firms that are making losses will be purchased by their more successful rivals.
B) Inefficient firms will exit the market and new cost-efficient firms will enter the market.
C) Firms will have to raise their prices to cover costs of production.
D) Some firms will exit the market causing the demand to increase for firms remaining in the market.
D
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When people say, "government officials act on the basis of the property rights which they perceive," they mean
A) government officials are inherently conservative. B) government officials do not have to be concerned about information being scarce. C) government officials make decisions based on the expected consequences to themselves. D) government officials will ordinarily not confiscate property without due process of law.
Investment demand is downward sloping because as the interest rate decreases,
A) each project's internal rate of return decreases. B) each project's internal rate of return increases. C) more projects will have an internal rate of return that exceeds the interest rate. D) more projects will have an internal rate of return that is less than the interest rate.
Social Security payments were not indexed to adjust for inflation until:
A. 1940. B. 1968. C. 1975. D. 1990.
When adding another unit of labor leads to an increase in output that is smaller than the increases in output that resulted from adding previous units of labor, the firm is experiencing
a. diminishing labor. b. diminishing output. c. diminishing marginal product. d. negative marginal product.