Absolute advantage occurs when one producer has greater productivity compared to another producing the same product
Indicate whether the statement is true or false
TRUE
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Expectations of asset values by participants in financial markets
A) are not possible to model, given the current state of economic knowledge. B) determine market prices, but are not related to changes in market prices. C) generally do not change. D) determine current market prices and changes in market prices.
In the above figure, what would happen to the monopolistically competitive industry in the long run?
A) More producers would enter the market, and the share of the market to this firm would fall, which would cause the demand curve to shift leftward until there is zero economic profit. B) More producers would exit the market, and the share of the market to this firm would fall, which would cause the demand curve to shift leftward until there is zero economic profit. C) More producers would enter the market, and the share of the market to this firm would rise, which would cause the demand curve to shift rightward until there is zero economic profit. D) More producers would enter the market, and the share of the market to this firm would fall, which would cause the demand curve to shift leftward until there is negative economic profit.
Economists argue that individuals should continue to consume until total benefit equals total cost.
Answer the following statement true (T) or false (F)
Vertical merger occurs when
A) two firms merge where one had sold its output to the other as an input. B) the merger moves the combined firm onto the horizontal portion of its long-run average cost curve. C) two firms merge where each is about the same size. D) two firms producing a similar product merge.