In August 2008, Ethan Nicholas developed the iShoot application for the Apple iPhone 3G, and within five months had earned $800,000 from this program. By May 2009, Nicholas had dropped the price from $4.99 to $1.99 in an attempt to maintain sales
This example indicates that in a competitive market
A) earning an economic profit in the long run is extremely easy.
B) economic profits are only earned in the long run.
C) earning an economic profit in the long run is extremely difficult.
D) it is impossible to earn an economic profit in either the short run or the long run.
C
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Bill Gates is a founder of Microsoft and the world's richest individual. Suppose Microsoft sells more software and Mr. Gates acquires another billion dollars in wealth
Simultaneously, suppose a burglar whose income is well below average broke into Bill Gates' house and stole a million dollars' worth of antiques. Using the "it's not fair if the rules aren't fair" approach to fairness, is Mr. Gates' acquisition of additional wealth fair? Is the (poor) thief's acquisition fair?
If inventories are being depleted, firms may respond by cutting prices
a. True b. False Indicate whether the statement is true or false
In the short run, if a perfectly competitive firm is producing at a price below average total cost, its economic profit is:
a. positive. b. negative. c. zero. d. normal.
As disposable income decreases, consumption:
A. increases. B. decreases. C. may either increase or decrease depending on the wealth effect. D. may either increase or decrease depending on the mpc.