The free entry and exit of firms in a monopolistically competitive market guarantees that
a. both economic profits and economic losses can persist in the long run.
b. both economic profits and economic losses disappear in the long run.
c. economic profits, but not economic losses, can persist in the long run.
d. economic losses, but not economic profits, can persist in the long run.
b
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Other things being equal, a rise in a country's terms of trade increases its welfare. What would happen if we relax the ceteris paribus assumption, and allow for the law of demand to operate internationally?
What will be an ideal response?
In short-run equilibrium in a perfectly competitive market, firms always make zero economic profit
a. True b. False Indicate whether the statement is true or false
The minimum wage, if it is binding, raises the incomes of
a. no workers. b. only those workers who cannot find jobs. c. only those workers whose jobs would pay less than the minimum wage if it didn't exist. d. all workers.
In the early 2000s, some argued that the Indian government impeded foreign investment with tariffs, investment caps, and tons of red tape. In terms of promoting or retarding economic growth, such policies:
A. increase growth because they keep people producing for the local market. B. decrease growth because they slow the growth of capital. C. increase growth because they stop exploitation by foreigners. D. decrease growth because they cause inflation.