Monopolists always earn positive short-run economic profit
a. True
b. False
B
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Entry by new firms into a perfectly competitive industry
A. has no effect on existing firms. B. results in higher output by existing firms in equilibrium. C. results in lower output by existing firms in equilibrium. D. results in no change in the market price or output.
If Argentina suffers from capital flight, Argentinean domestic investment and Argentinean net exports will both decline
a. True b. False Indicate whether the statement is true or false
The Coase theorem states that
A. under certain conditions, private parties can arrive at the efficient solution without government involvement. B. the private sector will fail to produce the efficient amount of a public good because of the free-rider problem. C. public goods should be produced up to the point where the additional benefit received by society equals the additional cost of producing the good. D. if there are external costs in production, the government must intervene in the market to assure that the efficient level of output is produced.
Which of the following statements about interest rates is false?
A. Interest rates typically reflect the risk involved in extending a loan B. Interest rates are affected by households' spending decisions C. The equilibrium interest rate is determined by the intersection of the supply and demand schedules for loanable funds D. The supply of loanable funds is independent of the rate of interest