Which of the following is a primary difference between price takers and price searchers that operate in markets with low barriers to entry?
a. The price searchers will maximize profits in the short run, but price takers will not. Price takers can only maximize profits in the long run.
b. The price searchers will have to search for the price, while price takers will have to take the price determined in the market.
c. The price searchers will be able to earn profit in the long run, but the price takers will not.
d. The price searchers may be able to earn profit in the short run, but the price takers will not be able to do so.
B
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Lulu did not vote in the last election. When Ari asked her why, she said, “None of the candidates thinks like I do, and there are so many voters that what I want and my vote don’t matter. I’m not wasting my time playing a game and throwing away my vote.” What would a public choice economist say about Lulu?
a. She lacks basic logic. b. She is a traitor. c. She does not understand economics. d. She is rationally ignorant.
If the U.S. has a capital account surplus, it means that
A. foreigners purchase more of U.S. assets than U.S. residents purchase foreign assets. B. U.S. exports of capital goods exceed its imports of capital goods. C. U.S. residents purchase more foreign assets than foreigners purchase U.S. assets. D. the quantity supplied of U.S. financial assets exceed the quantity demanded.
Which of the following is not included in the balance of the financial account of the United States?
A) a purchase of GE stock by a firm in China B) a purchase of a German brewery by the U.S. company, Budweiser C) a purchase of Toyota stock by Ford D) a purchase of U.S. car manufacturing plant by Toyota E) a purchase of German legal services by Chase Manhattan Bank
Consider a small open economy in equilibrium. What happens to the real interest rate, national saving, investment, and the current account balance in equilibrium in each of the following situations (each taken separately)
Explain which curve shifts and why, and show a diagram explaining your results. (You may assume that none of the shocks is large enough to significantly affect labor supply or labor demand significantly.) (a) wealth declines (b) business taxes decline (c) income rises temporarily