Technological change allows perfectly competitive firms to ________ and leads to ________
A) lower their costs; lower prices for consumers
B) raise their prices; higher prices for consumers
C) lower their costs; higher prices so the firms can earn economic profits in the long run
D) raise their costs; higher prices and maximum profits in the long run
E) lower their costs; deadweight loss
A
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Which of the following allows an economist to conclude that the welfare or happiness of society as a whole is clearly increasing?
A) A decrease in nominal GDP B) A decrease in real GDP C) An increase in nominal GDP D) An increase in real GDP E) None of the above.
When a $10 check written on the First National Bank of Chicago is deposited in an account at Citibank, then
A) the liabilities of the First National Bank increase by $10. B) the reserves of the First National Bank increase by $ 10. C) the liabilities of Citibank increase by $10. D) the assets of Citibank fall by $10.
According to PPP, the real exchange rate between two countries will always equal
A) 0.0. B) 0.5. C) 1.0. D) 1.5.
Consumer surplus measures
A) the extra amount that a consumer must pay to obtain a marginal unit of a good or service. B) the excess demand that consumers have when a price ceiling holds prices below their equilibrium. C) the benefit that consumers receive from a good or service beyond what they pay. D) gain or loss to consumers from price fixing.